Nifty above 23,450 could reach 23,650, says SBI Securities’ Shah

Nifty could extend its recovery towards 23,650 if it decisively clears the 23,400–23,450 resistance band, SBI Securities’ Sudeep Shah told Economic Times Markets in an interview published on October 17. His outlook remains conditional on the index holding above 22,750, with heavyweight bank earnings likely to influence the next move.

Sensex and Nifty gained for a second consecutive session on Friday, October 16. IT shares advanced for a fourth session, while buying in auto, metal and public-sector banking stocks also supported the market.

Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, cautioned that the rebound was concentrated in selected large companies. Broader participation and sustained improvement in foreign investor positioning were still needed before calling a durable trend reversal.

Nifty’s recovery faces a key resistance test

Shah linked the rebound to easing global pressures after a prolonged decline. In his account, Nifty had fallen nearly 10.5% from 24,774 to 22,179 since early August and recorded eight consecutive weekly losses as rising US bond yields encouraged foreign fund withdrawals.

US yields subsequently eased from 5.36% to 5.09%, while crude oil’s upward move temporarily paused. Nifty IT led the weekly recovery with a gain of nearly 11.72%, he said.

On the weekly chart, Shah identified a strong bullish candle following a Doji—a formation that can indicate market indecision—as a possible early reversal signal. He placed support at 22,800–22,750 and said a decisive move above 23,450 could take Nifty towards its 100-day exponential moving average, or EMA, near 23,650.

Bank earnings could determine the next move

Shah identified results from HDFC Bank, ICICI Bank and Axis Bank, which he said were scheduled over the weekend, as the immediate focus. He put their combined weights at 22.8% of Nifty and 42.85% of Bank Nifty, making their performance particularly important for both indices.

Bank Nifty had extended its rebound for a second week and was trading above its 20-day EMA. Shah said its rising relative strength index, or RSI, near 52 pointed to improving short-term momentum.

He placed resistance at 56,000–56,100, around the 50-day EMA. A sustained break above 56,100 could open the way to 56,600 and then 57,300, while 55,300–55,200 was his support band.

Tech Mahindra, TCS and Infosys: levels to watch

Shah remained constructive on IT shares, citing improving strength relative to Nifty. The sector’s RSI was around 73 after a sharp rebound, and he identified 32,000–32,200 as an immediate resistance zone for Nifty IT that would need to be cleared sustainably.

For Tech Mahindra, he highlighted a break above the previous swing high of ₹1,687 recorded on July 29. He placed immediate support at ₹1,690–₹1,700 and expected the recovery to continue while that band held.

TCS had rebounded on stronger trading volumes and closed near its 200-day EMA, Shah said. His support zone was ₹2,400–₹2,410, with further recovery dependent on the stock remaining above it.

Infosys had recovered from ₹980–₹990 and regained its 20-, 50- and 100-day EMAs. Shah identified ₹1,110–₹1,120, around the 100-day EMA, as the immediate support area. These were conditional technical assessments, not assured price outcomes.

Foreign buying improves, but conviction remains limited

According to Shah, foreign institutional investors bought a net ₹1,166 crore of cash-market equities on October 16, ending 14 consecutive sessions of withdrawals totalling ₹84,138 crore. He said one positive session was insufficient to establish a meaningful change in sentiment.

The FII index-futures long-short ratio rose from 8.95% on October 12 to 11.32% on October 16. Shah also cited a decline in net index-futures contracts from 2.95 lakh to 2.72 lakh as evidence of short covering, while stressing that this would need to persist to underpin a more durable recovery.

Volatility remained another risk to watch. Shah placed India VIX resistance at 15.7–16; a breakout could disrupt the equity rebound. A sustained fall below its 12.5–12.8 support band, by contrast, could help the recovery continue.

Selective large-caps retain the advantage

Shah expected selected large-cap shares to maintain their near-term lead, noting that the Nifty Midcap 100 and Nifty Smallcap 100 had lagged the benchmarks. He favoured IT, private banks and media on relative-strength measures.

Despite public-sector bank buying in Friday’s rally, his broader short-term assessment put PSU banks among the relatively weaker groups, alongside CPSE, PSE and FMCG indices. The distinction reflects his focus on relative sector performance rather than a single day’s gains.