Market Expert Reveals Top Stock Picks for Budget Week 2026
As the Budget 2026 trading week approaches, market participants are closely watching technical indicators and expert recommendations to navigate the volatile landscape. Sudeep Shah, Head of Technical Research and Derivatives at SBI Securities, has identified two standout stocks for potential accumulation during this critical period.
Nifty Technical Outlook: Correction Deepens Below Key Levels
The benchmark Nifty index has experienced a sharp correction of over 5% from its all-time high within just eleven trading sessions, marking one of the steepest declines in recent memory. After finding interim support near the 24,900 level last Wednesday, the attempted rebound lacked momentum, with selling pressure resurfacing on Friday to push the index lower once again.
This correction has been primarily driven by sustained weakness in heavyweight stocks:
- Reliance Industries has declined nearly 12% month-to-date
- HDFC Bank is down 7.58%
- ITC has corrected sharply by approximately 20%
- L&T has slipped 8.32%
- Bharti Airtel has lost close to 6%
Technically, the situation has deteriorated as Nifty slipped below its 200-day Exponential Moving Average for the first time since April 2025. The weekly chart shows a sizeable bearish candle indicating strong distribution, while momentum indicators signal continued weakness. The weekly Relative Strength Index hovers near 45—its lowest level since April 2025—and trades below its 9-week average, reinforcing the prevailing bearish bias.
The broader market correction appears even more pronounced:
- Nifty Midcap 100 has broken below its 200-day EMA
- Nifty Smallcap 100 currently trades more than 7% below its 200-day EMA
Looking ahead, the 25,400–25,450 zone is expected to act as key resistance for Nifty. As long as the index remains below 25,450, further downside risk cannot be ruled out. Immediate support is placed near 24,800, followed by 24,600 in the near term.
Bank Nifty Analysis: Leadership Weakens as Trend Shifts
The banking benchmark, which had been outperforming in recent weeks, witnessed notable selling pressure during the previous week. Bank Nifty declined by over 2.5% and formed a large bearish candle on the weekly chart, signaling a clear momentum shift and supply emergence at higher levels.
From a trend perspective, Bank Nifty has slipped below its 50-day EMA for the first time since October 2025, indicating weakening of the short-term trend. This breakdown marks a loss of leadership from the banking sector, which had previously supported broader markets.
Momentum indicators further reinforce the bearish bias:
- Daily RSI has moved below the 40 mark for the first time since September 2025
- The -DI continues to remain well above the +DI, suggesting sellers maintain firm control
- Rising ADX points to strengthening of the prevailing negative trend
Going forward, the 100-day EMA zone near 58,200–58,100 is expected to act as immediate support. A decisive and sustained breakdown below 58,100 could accelerate 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 key resistance, with only a sustained move above this region indicating potential trend reversal.
Top Stock Recommendations for Budget Week
Hindustan Unilever (HUL)
Hindustan Unilever has been consolidating in the 2439–2341 range since January 6th, indicating a healthy pause after a strong pullback from December lows of 2245. Despite sideways action, the stock trades above both short- and long-term moving averages. Technical indicators suggest favorable positioning:
- RSI is nearing the 60 level
- MACD remains above both signal and zero lines
- ADX has started rising steadily, indicating strengthening bullish momentum
This indicator placement suggests the stock is well-positioned for an upside breakout. Recommendation: Accumulate in the 2420-2410 zone with a stoploss of 2340. Upside target: 2585 in the short term.
Ashok Leyland
Ashok Leyland has witnessed a breakout above its previous swing high of 192 recorded on January 5th, signaling 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 the near-term trend remains intact. Momentum has accelerated significantly, with 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.
Recommendation: Accumulate in the 194-192 zone with a stoploss of 186. Upside target: 210 in the short term.
Disclaimer: Recommendations and views on stock markets, 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.
