Stocks to buy: What’s the outlook for Nifty for Budget 2026 week? Check list of top stock recommendations
Stock market recommendations: According to Sudeep Shah, Head – Technical Research and Derivatives, SBI Securities, the top stock picks for the Budget week week are Hindustan Unilever, and Ashok Leyland. Here’s his view on Nifty, Bank Nifty for the Budget 2026 trading week starting January 27, 2026:Nifty View:From its all-time high, the benchmark index Nifty has undergone a sharp correction of over 5% within just 11 trading sessions, marking one of the steepest declines in recent times. While the index found interim support near the 24,900 level last Wednesday and attempted a modest pullback, the rebound lacked follow-through, and selling pressure resurfaced on Friday, pushing the index lower once again.The ongoing correction has been largely led by sustained weakness in index heavyweight stocks. On a month-to-date basis, Reliance Industries has declined nearly 12%, HDFC Bank is down 7.58%, ITC has corrected sharply by around 20%, L&T has slipped 8.32%, and Bharti Airtel has lost close to 6%, highlighting broad-based selling across frontline counters.Technically, the damage has deepened as the index slipped below its 200-day EMA for the first time since April 2025. On the weekly chart, Nifty has formed a sizeable bearish candle, reflecting strong distribution. Momentum indicators continue to signal weakness, with the weekly RSI hovering near 45—its lowest level since April 2025—and trading below its 9-week average, reinforcing the prevailing bearish bias.The correction is even more pronounced in the broader market. Both the Nifty Midcap 100 and Nifty Smallcap 100 have witnessed sharp declines over the past week. Notably, the Nifty Midcap 100 has broken below its 200-day EMA, while the Nifty Smallcap 100 is currently trading more than 7% below its 200-day EMA, underscoring strong bearish momentum across the broader space.Looking ahead, the 25,400–25,450 zone is expected to act as a key resistance for Nifty. As long as the index remains below 25,450, the risk of further downside cannot be ruled out. On the downside, immediate support is placed near 24,800, followed by 24,600 in the near term.Bank Nifty ViewThe banking benchmark index, Bank Nifty, which had been an outperformer over the past few weeks, witnessed notable selling pressure during the previous week. The index declined by over 2.5% and formed a large bearish candle on the weekly chart, signalling a clear shift in momentum and the emergence of supply at higher levels.From a trend perspective, Bank Nifty has slipped below its 50-day EMA for the first time since October 2025, indicating a weakening of the short-term trend. This breakdown marks a loss of leadership from the banking space, which had until recently been supporting the broader market.Momentum indicators further reinforce the bearish bias. The daily RSI has moved below the 40 mark for the first time since September 2025, reflecting rising downside momentum and deteriorating sentiment. Additionally, the –DI continues to remain well above the +DI, suggesting sellers maintain firm control. The rising ADX points to a strengthening of the prevailing negative trend rather than a mere corrective phase.Going forward, the 100-day EMA zone near 58,200–58,100 is expected to act as the immediate support area.A decisive and sustained breakdown below 58,100 could accelerate the correction toward 57,500, followed by 57,000 in the near term. On the upside, the 20-day EMA band of 59,300–59,400 is likely to act as a key resistance zone, and only a sustained move above this region would indicate a potential trend reversal or recovery.
Stock recommendations
Hindustan UnileverHindustan Unilever has been consolidating in the 2439–2341 range since 6th January, indicating a healthy pause after a strong pullback from the lows of 2245, made on 12th December. Despite the sideways action, the stock trades above its short- and long-term moving averages. The RSI is nearing the 60 level, while the MACD remains above both the signal and zero line. The ADX has started to rise steadily indicating strengthening bullish momentum. Indicator’s placement suggests that the stock is well-positioned for an upside breakout. Hence, we recommend to accumulate the stock in the zone of 2420-2410 with a stoploss of 2340. On the upside, it is likely to test the level of 2585 in the short term.Ashok LeylandAshok Leyland has witnessed a breakout above its previous swing high of 192, recorded on 5th January, signalling a resumption of the uptrend. Although the stock briefly slipped below its 20-day EMA earlier in the week, it swiftly reclaimed the level and pushed higher, highlighting strong buying interest at lower levels. The stock’s ability to sustain above its short-term moving average confirms that the near-term trend remains intact. Momentum has accelerated, with the RSI surging from 54 to 68 in just three sessions, reflecting strong bullish strength. Additionally, the stock has closed above the upper Bollinger Band, suggesting continued outperformance and potential for further upside in the coming sessions. Hence, we recommend to accumulate the stock in the zone of 194-192 with a stoploss of 186. On the upside, it is likely to test the level of 210 in the short term.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)
