The Nifty is showing strong upward momentum as we head into the week of January 5, 2026, with analysts recommending specific stocks for investors. Sudeep Shah, Head – Technical Research and Derivatives at SBI Securities, has identified CESC and Indian Bank as top stock picks for the upcoming trading period. Indian equities commenced the new calendar year with significant strength, pushing the Nifty to a fresh all-time high. After reaching a peak of 26325 on December 1, 2025, the index entered a consolidation phase, trading within a narrow range of 633 points, its tightest monthly range since August 2023.
Over the past four sessions, the market sentiment has decisively shifted in favor of the bulls. The index has climbed nearly 450 points from its recent swing low of 25878, largely propelled by the strength of heavyweight counters. Participation indicators have also improved. Nifty Futures rollover rose to 72.29% in the December series, an increase from 68.77% in November and slightly above the three-month average of 72.28%, indicating continued trader confidence and a willingness to carry positions forward.
How to understand Nifty’s upward momentum? The daily Relative Strength Index (RSI) has moved past the 60 level, signaling firming momentum and increasing prospects for further gains. Reliance Industries was a significant contributor to the week’s advances, rising by 2.12%.
On the sectoral front, metals led the market surge, with the Nifty Metal index jumping 5.7% due to broad-based buying across its constituents. However, the overall gains were somewhat tempered by a steep decline in ITC, which fell 13.39% following the government’s notification of a substantial increase in cigarette excise duties.
Looking ahead, the current chart setup suggests the Nifty is poised to extend its upward move. The index may test the 26500 level and subsequently aim for 26700 in the near term. On the downside, the support zone is expected to be between 26150 and 26100.
Bank Nifty has continued its strong upward trajectory, outperforming the broader market indices with a gain of nearly 2% last week. The index confirmed a breakout from a falling channel on the daily chart, a crucial technical development that signaled a sentiment shift, followed by a sharp upside move. This breakout also allowed the index to register a new all-time high, highlighting the strength and sustainability of the current uptrend.
What is the technical setup for Bank Nifty? The technical indicators remain constructive. The daily RSI has climbed to 67.55 and is trending upwards, reflecting solid momentum. The MACD histogram has turned positive, supporting the bullish outlook. The daily Stochastic oscillator also aligns with the current up move, indicating that buying pressure remains dominant.
In this positive environment, Bank Nifty is expected to continue its upward trajectory in the near term. Potential upside targets are around 60600, followed by 61200. On the downside, the 59700–59600 band is anticipated to serve as immediate support. Maintaining a hold above this zone should preserve the positive structure and limit any short-term pullbacks.
CESC has achieved a decisive breakout above its downward-sloping trendline on the daily chart. Today’s move was supported by a notable surge in trading volumes, indicating strong buyer participation. The RSI has sharply increased from 39 to 61 over the last four trading sessions, signaling a swift shift in momentum from bearish to bullish.
Additionally, the DI+ crossing above DI- on the ADX suggests emerging trend dominance by buyers. The stock has also closed above the upper Bollinger Band, highlighting strong bullish momentum and the potential start of an expansionary move. Therefore, accumulating CESC in the zone of 176-174 with a stoploss of 165 is recommended. On the upside, it is likely to test the 189 level in the short term.
Indian Bank experienced a decisive breakout from its 14-session consolidation range of 764–796 on December 30th, supported by a significant surge in volumes, confirming strong buying interest. Following the breakout, the stock has shown solid follow-through over the subsequent three trading sessions, indicating acceptance of higher levels and sustained demand.
Best stocks to buy for 2026? While the focus is on the immediate week, the underlying strength in these recommended stocks suggests potential for continued growth. Indian Bank has closed above the upper Bollinger Band for three consecutive sessions, signaling strong momentum and an expansion phase. Momentum indicators remain supportive, with MACD crossing above the signal line and rising green histogram bars, while RSI is trending higher at 66, reinforcing the bullish outlook.
Hence, we recommend accumulating Indian Bank in the zone of 862-856 with a stoploss of 830. On the upside, it is likely to test the 920 level in the short term.
Why is Nifty showing strength? The combination of positive technical indicators, strong participation from heavyweight stocks, and sector-specific rallies, particularly in metals, are contributing to the Nifty’s upward momentum. The Bank Nifty’s breakout from a falling channel further bolsters the bullish sentiment. The recommended stocks, CESC and Indian Bank, have shown clear technical breakouts supported by strong volume and momentum indicators, suggesting potential for further appreciation.
