The Indian stock market is poised to conclude the year with moderate gains, navigating a complex mix of supportive and challenging factors. While strong purchasing by domestic institutional investors (DIIs), supported by a favourable growth-inflation scenario, has maintained positive momentum, significant headwinds have capped the upside. These include substantial foreign capital outflows, stretched valuations, a delayed India-US trade deal, underwhelming corporate earnings, and the depreciation of the Indian rupee.
Market Performance and Expert Outlook
Despite the challenges, key indices have managed to stay in positive territory for the year. The Nifty 50 has advanced over 9%, while the broader Nifty 500 index has gained more than 5% so far. This performance, however, masks a story of stark divergence among individual stocks. Within the Nifty 500, shares like Force Motors have skyrocketed by 173%, and L&T Finance has surged 122%, delivering multibagger returns. On the flip side, Tejas Networks has plunged 62%, and Ola Electric has tumbled 60%, suffering losses exceeding 50%.
Market analysts believe the coming year will favour discerning stock selection over broad, aggressive sector bets. They advise investors to focus on identifying quality companies with robust fundamentals and positive technical indicators to navigate the expected volatility. Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, has identified five such stocks with long-term potential, offering specific entry points, targets, and stop-loss levels for 2026.
Detailed Technical Picks for 2026
Birlasoft: Targeting a 38% Upside
Patel notes that Birlasoft is forming a double-bottom pattern on its weekly chart around the 61.8% Fibonacci retracement level, measured from the COVID-19 lows to its peak in January 2024. This zone has proven to be a strong area of demand, halting the stock's corrective decline. Momentum is turning positive, with the weekly Relative Strength Index (RSI) displaying a bullish divergence and crossing above its prior swing high, signalling strengthening underlying momentum and a potential trend reversal.
Based on these signals, a phased accumulation strategy is recommended. Investors can consider buying in the ₹435–415 range for an upside target near ₹600. Risk should be managed with a stop loss placed below ₹335 on a daily closing basis.
Praj Industries: Eyeing 28% Growth
Praj Industries has corrected nearly 67% over the past year, bringing its price back to a crucial demand zone around the ₹300 mark—a level that provided strong support in 2022 and 2023. Recently, the stock has witnessed aggressive buying interest accompanied by a sharp spike in trading volumes, indicating fresh accumulation. Technically, the yearly pivot support level aligns with this ₹300 zone, reinforcing its importance. The weekly RSI has also completed an impulsive V-shaped recovery, suggesting a positive shift in momentum after a prolonged downtrend.
Given this convergence of support, volume strength, and improving momentum, staggered buying in the ₹345–330 zone is advised. The upside target is ₹440, with a stop loss at ₹290.
Tata Elxsi: A 26% Potential Rally
Tata Elxsi has been in a gradual corrective phase since 2022, resulting in a drawdown of approximately 56% from its all-time high. The stock is now trading within a key Fibonacci retracement pocket between the 50% and 61.8% levels, an area that often acts as a medium-term accumulation zone. Technical conditions are improving: the weekly RSI has broken out of a triangle pattern, and the price action has confirmed a falling-trendline breakout. Both signals point to a potential trend reversal after an extended decline.
A long-bias approach is recommended. Traders may consider accumulating the stock in the ₹5,430–5,250 range, with an upside target of ₹6,800. Risk can be contained with a stop loss at ₹4,600.
Coal India: Breaking Out for 22% Gains
Coal India has been consolidating in a tight range between ₹370 and ₹400 for nearly 10–12 months. Throughout this phase, momentum has remained resilient, with the RSI consistently holding above the 40 level, indicating that bearish pressure has been absorbed. A recent technical development is key: the stock has broken above its previous swing high, signalling a potential end to the consolidation and the beginning of a fresh upward move. This breakout improves the risk-reward setup, supported by steady volume activity.
Given these developments, accumulation in the ₹386–376 zone is suggested. The upside potential is seen towards ₹470, while risk can be managed with a stop loss at ₹336.
Rail Vikas Nigam (RVNL): Bullish Pattern Suggests 22% Rise
Patel highlights that RVNL has formed a bullish Bat pattern near the ₹300–305 zone. This region has consistently acted as a price cushion since August 2025, establishing itself as a critical support area. Additionally, a falling trendline support is visible on both the price chart and the RSI, indicating that downward momentum is easing and buyers are stepping in at lower levels. These converging technical signals strengthen the case for a potential rebound from current levels.
Considering this setup, traders may initiate long positions in the ₹320–310 accumulation zone, looking for an upside target near ₹390. A stop loss should be placed at ₹277 on a daily closing basis.
Investment Strategy for the New Year
The overarching theme from experts is clear: 2025 will reward selective stock-picking based on rigorous analysis. While the market presents opportunities across several sectors, the emphasis should be on companies with healthy fundamentals confirmed by sound technical indicators. The picks from Anand Rathi's technical research, spanning IT, engineering, renewable energy, commodities, and infrastructure, reflect this disciplined approach. Investors are advised to use these technical levels as a framework and consult with certified financial experts before making any investment decisions, as market conditions are dynamic and subject to change.
