Chartist Talk: Mid- and small-caps near capitulation? Sudeep Shah bets on 2 stocks for next week

According to Shah, the 22,180 level remains a crucial support zone for Nifty in the coming week. "Decisive breach below 22,180 may trigger further downside towards 22,000-21,850," he said. Sudeep Shah bets on Kross, and Bharti Hexacom for next week. "Kross has been moving in a higher high–higher low formation on the daily chart, reflecting a sustained uptrend, while despite the consolidation, Bharti Hexacom continues to trade above its key moving averages, reflecting a positive underlying trend," he said.

Will the Nifty defend the 22,180 level next week as bears gradually gain strength? The 22,180 level remains a crucial support zone for Nifty in the coming week. While the broader market has witnessed a sharp correction and bearish sentiment has intensified, Nifty has so far shown relatively better resilience compared to the Midcap and Smallcap segments. The recent weakness emerged after the index failed to sustain above the 38.2 percent Fibonacci retracement level near 23,200, resulting in renewed selling pressure and the formation of a bearish candle on the weekly chart.

Technically, the index continues to trade below its key moving averages, indicating that the short-term trend remains weak. In addition, the daily RSI is drifting lower and is approaching the important 40 mark, which signals fading momentum. However, the zone of 22,180-22,100 coincides with a significant support area and is likely to act as the first line of defence for the bulls. That said, the behaviour of the broader market warrants close attention.

The sharp decline in Midcap and Smallcap indices reflects a clear risk-off sentiment, and if this weakness persists, it could eventually weigh on the benchmark index as well. Therefore, a decisive breach below 22,180 may trigger further downside towards 22,000-21,850. On the upside, Nifty needs to reclaim and sustain above 22,600-22,700 to signal any meaningful recovery. Overall, while Nifty may attempt to defend the 22,180 level next week, the broader market weakness and deteriorating momentum indicators suggest that bears currently hold a slight edge.

Will Eternal extend its recovery and reclaim its September swing high in the short term? Eternal witnessed strong buying interest in the Rs 305–300 zone, which had earlier acted as a resistance during January–February 2026. The zone also coincided with the stock’s 100-day EMA, making it a crucial support area. The stock is currently undergoing a phase of consolidation, with directional momentum yet to emerge.

As long as the stock sustains above the Rs 305–300 zone, the stock can extend its recovery and reclaim its September high in the short term. Will International Gemmological Institute (IGIL) sustain its bullish structure next week, especially after the recent sharp rally? IGIL has witnessed a downward sloping trendline breakout on the daily chart, supported by a strong follow-through move and healthy volumes, indicating renewed buying interest.

The RSI has also broken above its downward sloping trendline, reflecting a revival in bullish momentum. Additionally, the DI lines have widened, with DI+ positioned above DI-, highlighting strengthening bullish dominance. As long as IGIL sustains above the Rs 355–350 zone, the bullish structure is likely to remain intact, with the potential for further upside in the near term. Is it time to turn decisively bullish on Cyient after it broke above a horizontal trendline on Friday and surged nearly 8 percent?

Cyient has witnessed a horizontal trendline breakout on the daily chart, supported by a strong rise in trading volumes, indicating renewed buying interest. The 20-day EMA has acted as a dynamic support, with the stock attracting strong buying interest around this level on multiple occasions in the recent past. Additionally, the ratio line in Cyient/Nifty ratio chart continues to trend higher, highlighting the stock’s relative outperformance against the benchmark index.

The overall technical setup remains positive, with the uptrend likely to extend as long as the stock sustains above the Rs 1,200–1,190 zone. What are the top two stocks to buy for next week? Kross has been moving in a higher high–higher low formation on the daily chart, reflecting a sustained uptrend. The stock trades above its key short and long-term moving averages, while the 20-day EMA has acted as a dynamic support.

The stock witnessed strong buying interest around this zone on multiple occasions since mid-August, highlighting the significance of this support. The MACD line has crossed above the signal line and is trading above the zero line, accompanied by rising green histogram bars, indicating strengthening bullish momentum. The overall technical setup remains positive, with the bullish bias likely to stay intact as long as the stock sustains its upward trajectory.

Hence, the accumulation is recommended in the zone of Rs 302-307 with a stop-loss of Rs 292. On the upside, it is likely to test the level of Rs 325 in the short term. Bharti Hexacom has been consolidating within the Rs 1,679–1,578 range over the last five trading sessions, with the Rs 1,675–1,680 zone emerging as a crucial resistance, which had earlier capped the stock’s upside in July 2026. Despite the consolidation, the stock continues to trade above its key moving averages, reflecting a positive underlying trend.

The MACD slope is rising and remains above the zero line, indicating a gradual buildup of bullish momentum. Additionally, DI+ continues to remain above DI- on the ADX indicator, highlighting the continued dominance of bulls. The overall technical setup suggests a potential breakout and further upside in the near term. Hence, the accumulation is recommended in the zone of Rs 1,625-1,645 with a stop-loss of Rs 1,575.

On the upside, it is likely to test the level of Rs 1,760 in the short term. Could the Bank Nifty break below its September 29 low next week? The possibility of Bank Nifty breaking below its September 29 low cannot be ruled out, as the overall technical setup continues to remain weak. The index underperformed the frontline indices during the week, declining nearly 3 percent and ending near the 54,300 mark.

More importantly, it registered its lowest weekly close since May 2026 and formed a sizeable bearish candle on the weekly chart, indicating sustained selling pressure. From a trend perspective, Bank Nifty remains firmly in a corrective phase. The index is trading more than 3 percent below its 50-day EMA and over 4 percent below its 200-day EMA, while all key moving averages continue to slope downward.

This suggests that the broader trend remains negative and rallies are likely to face selling pressure. Momentum indicators are also not offering any signs of improvement. Both the daily and weekly RSI have slipped below the 40 mark and are trending lower, reflecting weakening buying interest. In addition, the daily ADX is rising and hovering around 23, indicating that the current downtrend is gaining strength.

The fact that the -DI remains above the +DI further highlights the dominance of bears. Therefore, if the index fails to attract meaningful buying support at current levels, a break below the September 29 low could trigger an extension of the corrective phase towards 53,400 and subsequently 52,800. On the upside, the 54,800-55,000 zone remains a key hurdle and needs to be surpassed to improve the near-term outlook.

Overall, the technical evidence suggests that bears currently retain the upper hand. Are midcaps and smallcaps showing early signs of capitulation after being hit harder than the benchmark indices in the recent correction? The sharp correction in midcap and smallcap stocks has undoubtedly increased market anxiety, but the available technical evidence does not yet point to a clear capitulation phase.

While both the Nifty Midcap 100 and Nifty Smallcap 100 witnessed severe selling pressure during the week, declining by nearly 6 percent and over 7 percent, respectively, the price action currently suggests an acceleration of the corrective trend rather than a final washout. From a technical standpoint, both indices have formed sizeable bearish candles on the weekly chart and are trading below their key short-term and long-term moving averages.

This indicates that the broader trend remains weak and sellers continue to dominate. Momentum indicators also remain unfavorable, as the daily and weekly RSI for both indices are hovering in bearish territory and have not yet shown any meaningful signs of positive divergence or reversal. Historically, capitulation is often accompanied by panic selling followed by stabilization in momentum and market breadth.

At present, such confirmation signals are largely absent. Therefore, it would be premature to conclude that the broader market has reached a capitulation phase. Going ahead, 56,500-56,600 remains a crucial resistance zone for the Nifty Midcap 100, while 18,050-18,100 is an important hurdle for the Nifty Smallcap 100. As long as these levels remain intact, the corrective trend is likely to persist.

On the downside, Midcap 100 may drift towards 55,000-54,000, while Smallcap 100 could decline towards 17,500-17,200. Overall, the broader market is showing signs of stress and risk aversion, but a definitive capitulation signal is yet to emerge.