Nifty uptrend intact above 24,800. LKP’s Vatsal Bhuva picks two stocks for the week

Indian equities’ sharp rebound still has room to run, with Nifty’s broader uptrend intact as long as the index holds above the crucial 24,800 level, according to Vatsal Bhuva, Technical and Derivatives Analyst at LKP Securities.

While the recent surge has pushed momentum indicators into overbought territory, Bhuva views any near-term consolidation as a buying opportunity rather than a trend reversal. He expects the index to move towards 25,500–25,800 and has picked Karnataka Bank and HDFC Life among his top stock ideas for the week.

Edited excerpts from a chat:


Nifty has rallied sharply from its recent lows and moved above 25,000, but momentum indicators are now in overbought territory. Is this the start of a durable uptrend or is the market due for a meaningful consolidation? What levels will confirm a fresh breakout, and what would be the first technical warning that the rally is losing momentum?

The recent rally signals the beginning of a durable uptrend, and any near-term consolidation or mild retracement should be viewed as a buying opportunity rather than a trend reversal.

Nifty has witnessed a sharp recovery and is now trading significantly above its short-term 20-day moving average (20-DMA). Additionally, the RSI has moved above 70, indicating overbought conditions and raising the possibility of some consolidation or a mild retracement.

The immediate support for the index is placed at 25,000, while the positional support stands at 24,800, which coincides with the crucial swing-high breakout zone. On the upside, resistance is placed at 25,500 and 25,800. The broader technical structure remains positive, and a decisive closing breach below 24,800 would invalidate the ongoing bullish structure and could push the index into a corrective phase. Until then, the broader trend remains positive.

Bank Nifty has approached its previous high near 61,765 after a very rapid rally. Can it decisively break out towards 63,000, or does the risk-reward now favour waiting for a pullback?

Existing long positions can be held, but the current risk-reward ratio does not favour initiating fresh long positions. A buy-on-dips strategy would be more appropriate for traders at current levels.

Bank Nifty has witnessed a sharp run-up and is trading significantly above its 20-DMA, while the RSI also indicates overbought conditions. Furthermore, an unfilled gap on the technical chart creates the possibility of a gap-filling move in case of a retracement, although gap filling is not necessarily guaranteed.

However, the underlying market structure remains strong, with heavyweight private sector banks such as SBI, ICICI Bank, HDFC Bank and Kotak Mahindra Bank, along with several PSU banking stocks, displaying significant buying interest. Technically, 60,500 is an immediate support level, while 61,765 remains the crucial resistance and previous-high zone. A sustained breakout above 61,765 could open the possibility of further upside towards 63,000.

Financials, NBFCs, realty and PSU banks have led the recent rally, while IT has lagged. Does the sectoral rotation indicate a healthy broadening of the market, or is it simply a narrow FII-led trade?

The recent sectoral rotation indicates a healthy broadening of market participation rather than a narrowly concentrated FII-led rally.

The market structure has witnessed a notable improvement, with leadership gradually shifting from IT stocks towards banking, financials, NBFCs, realty and PSU banking stocks. This rotation suggests that buying interest is expanding across multiple sectors, which is a positive sign for the sustainability of the broader market recovery.

Moreover, the return of FII buying has supported heavyweight banking and financial stocks, while the participation of several PSU banks and other sectoral constituents indicates improving internal market strength. Although IT has relatively underperformed, the emergence of multiple sectoral leaders is encouraging. Going ahead, sustained participation across sectors, supported by improving market breadth and volumes, will be crucial for confirming the durability of this rally.

What is the current technical setup in HDFC Bank, ICICI Bank and SBI? Which of these stocks has the strongest breakout structure?

ICICI Bank currently has the strongest breakout structure, followed by SBI, while HDFC Bank is witnessing a mean-reversion rally with further confirmation required for a complete trend reversal.

ICICI Bank: The stock is displaying a strong bullish structure on the monthly chart. A decisive breakout above the 1,485 resistance zone indicates the possibility of the next leg of the uptrend following its corrective phase. The breakout reflects improving buying momentum and a favourable technical setup.

SBI: A double-bottom formation is visible on the chart, indicating a potential bullish reversal. However, a decisive breakout above its previous swing high of 1,125 is crucial to confirm the pattern and trigger the next leg of upside.

HDFC Bank: The recent recovery can be characterised as a mean-reversion rally. Given HDFC Bank's significant weight in FII portfolios, the return of foreign institutional buying was expected to support momentum in the stock. Technically, it has reclaimed its 200-DMA, which it had breached in January 2026 and subsequently traded below. However, a decisive close above the strong swing-high and supply zone of 860 would provide stronger confirmation of a trend reversal and open the possibility of the stock moving towards its all-time high.

Kalyan Jewellers has gained sharply after its Q2 results and hit a fresh 52-week high, but the stock saw some profit-taking on Friday. Does the chart still support further upside, or has the move become excessively extended?

The broader technical structure remains bullish, and the recent profit booking does not invalidate the breakout. However, investors and traders should avoid chasing the stock at elevated levels and wait for a meaningful pullback towards 670–680.
On the monthly chart, the stock has decisively broken above its previous swing-high resistance, indicating that the corrective phase following its prolonged uptrend may have concluded and the primary uptrend is likely to resume.

Despite the positive structure, the recent sharp rally warrants a disciplined entry strategy. A buy-on-dips approach would be preferable, with the 670–680 zone offering a favourable entry opportunity. Traders and investors can consider accumulating the stock in this zone, keeping a stop-loss below 650, with an upside target of 750–775.

Give us your top ideas for the week ahead.


Karnataka Bank - BUY: 361-355 | Stoploss: 344 | Target: 388

Rationale: Karnataka Bank is displaying a strong bullish continuation setup on the weekly chart. The stock has formed a rounding-bottom pattern and delivered a decisive breakout, followed by a successful retest of the breakout zone. Subsequently, it has registered another consolidation breakout, indicating renewed buying interest. Additionally, the RSI is exhibiting hidden bullish divergence, suggesting that the broader uptrend is likely to continue after a brief pause. The stock has immediate support around 350, while the technical structure indicates upside potential towards 388.

HDFC Life - BUY: 592 | Stoploss: 571 | Target: 630


Rationale: After an extended downtrend, HDFC Life has started showing signs of a bullish trend reversal. The stock has formed a double-bottom pattern on the daily chart and reclaimed its 200-DMA, which it had breached in January 2026. Momentum indicators are also supportive, with the RSI witnessing a bullish crossover and moving above the 60 mark, accompanied by a breakout in the RSI structure. The combination of a bullish reversal pattern, moving-average reclaim and improving momentum indicates a favourable risk-reward opportunity, with the next upside objective placed around its previous swing high of 630.