Indian equity markets have started the new calendar year with robust momentum, setting the stage for a potentially rewarding week for investors. Sudeep Shah, Head of Technical Research and Derivatives at SBI Securities, has identified two standout stocks for the trading week commencing January 5, 2026, while providing a detailed technical perspective on the key indices.
Nifty and Bank Nifty: Charting the Path Forward
The benchmark Nifty index began 2026 on a powerful note, scaling a fresh all-time high. After reaching a peak of 26325 on December 1, 2025, the index entered a phase of consolidation, trading within a narrow band of 633 points—its tightest monthly range since August 2023. However, the last four sessions witnessed a decisive shift in favour of the bulls.
From a recent swing low of 25878, the Nifty rallied nearly 450 points, buoyed by strength in heavyweight stocks. A key indicator of market participation, the Nifty Futures rollover, rose to 72.29% for the December series, up from 68.77% in November and slightly above the three-month average of 72.28%. This suggests sustained trader confidence.
The rally on Friday pushed the daily Relative Strength Index (RSI) above the 60 mark, signalling firming momentum. While the metals sector surged 5.7%, gains were partially offset by a steep 13.39% fall in ITC following a government notification on increased cigarette excise duties. Looking ahead, the chart structure suggests the index is poised to extend its upward move, with potential targets at 26500 and 26700. Immediate support is seen in the 26150–26100 zone.
Bank Nifty Outperforms with Breakout
Bank Nifty outperformed the headline indices last week, posting a solid gain of nearly 2%. The index confirmed a significant technical breakout from a falling channel on the daily chart, subsequently registering a new all-time high. This underscores the strength of the prevailing uptrend.
The technical indicators for Bank Nifty remain constructive. The daily RSI has climbed to 67.55 and is trending higher, while the MACD histogram has turned positive. The daily Stochastic oscillator also aligns with the ongoing upward move. In this backdrop, Bank Nifty is expected to extend its rally, with upside potential towards 60600 and 61200. The 59700–59600 band is likely to act as immediate support.
SBI Securities' Top Stock Recommendations
Based on detailed technical analysis, Sudeep Shah of SBI Securities has selected two stocks with strong bullish setups for the week.
CESC: Bullish Breakout with Strong Volume
CESC has delivered a decisive breakout above its downward-sloping trendline on the daily chart. The move was accompanied by a noticeable surge in trading volumes, indicating robust buyer participation. The stock's RSI has jumped sharply from 39 to 61 over four sessions, signalling a swift shift from bearish to bullish momentum.
Further strengthening the case, the +DI crossing above the -DI on the Average Directional Index (ADX) suggests buyers are gaining dominance. The stock has also closed above the upper Bollinger Band, highlighting strong bullish momentum. SBI Securities recommends accumulating CESC in the range of 176-174, with a stop loss placed at 165. The stock has a short-term target of 189.
Indian Bank: Follow-Through Buying Post Consolidation
Indian Bank witnessed a decisive breakout from its 14-session consolidation range of 764–796 on December 30. This breakout was confirmed by a sharp increase in volumes. The stock has shown solid follow-through buying in the subsequent three sessions, indicating acceptance at higher levels.
The stock has closed above the upper Bollinger Band for three consecutive days, signalling strong momentum. Key indicators like the MACD have crossed above its signal line with rising histogram bars, while the RSI is trending higher at 66. The recommendation is to accumulate Indian Bank in the 862-856 zone, with a stop loss of 830. The short-term target for the stock is set at 920.
(Disclaimer: The recommendations and views expressed are those of the individual analyst and do not represent the views of The Times of India. Investors are advised to consult certified experts before making any investment decisions.)
