F&O Talk: Smallcaps look strong on charts, says Sudeep Shah; outlines Trent, Swiggy, Kalyan Jewellers strategy

Published 8 August 2026 · finance

The Indian stock markets closed in the red, with the newly-launched closing auction session continuing to create a divergence among the benchmark indices Sensex and

The Indian stock markets closed in the red, with the newly-launched closing auction session continuing to create a divergence among the benchmark indices Sensex and Nifty.Sensex closed nearly 456 points lower (0.58%) at 78,499 while Nifty 50 fell only 65 points (0.27%) to end the session at 24,571. Broader markets were mixed, with Nifty Smallcap 100 closing in the red, while Nifty Midcap 100 gained 0.2%.Analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, interacted with ETMarkets regarding the outlook for the Nifty and smallcaps, as well as an index strategy for the upcoming week. The following are the edited excerpts from his chat:1) What is your view on Nifty and Sensex for the coming week?The market spent another week searching for direction. Although Nifty started the week with a technical breakout above a downward-sloping trendline on the daily chart, the move quickly lost momentum as buyers failed to capitalize on the breakout. The result was a remarkably narrow trading range of just 346 points, the tightest weekly range since the last week of December 2025. Historically, such low-volatility phases seldom persist, often paving the way for a sharp directional move.On the weekly chart, the index formed a Doji candle, reflecting indecisiveness among market participants. Despite the lack of directional conviction, Nifty continues to trade above its key short-term and long-term moving averages, indicating that the broader trend remains constructive. However, momentum indicators and oscillators continue to portray a sideways bias, suggesting the market is waiting for a fresh trigger before its next meaningful move.Going ahead, the zone of 24,700-24,750 is likely to act as an immediate hurdle for the index. A decisive move above 24,750 could trigger a fresh rally towards the psychological level of 25,000, followed by 25,200 in the short term.On the downside, the 200-day EMA zone of 24,400-24,350 is expected to provide strong support. The index is now approaching a crucial technical inflection point, and whichever side breaks first is likely to dictate the market's next major trend.Last week, the benchmark index Sensex traded within a narrow range of 931 points.

On the weekly chart, it formed a small-bodied candle with shadows on both sides, reflecting a phase of indecision among market participants.From a trend perspective, the index continues to trade above its 20-day, 50-day, and 100-day EMAs, underscoring the presence of a broader positive bias. However, it has been hovering around its 200-day EMA over the past five trading sessions, indicating a lack of clear directional momentum. Momentum indicators also point towards consolidation, with the daily RSI slipped below the 60 mark. Additionally, the daily ADX is currently placed at 12.36, suggesting weak trend strength and the absence of a decisive move in either direction.Going forward, the 79,100-79,200 zone remains a critical resistance area. A sustained breakout above 79200 could trigger a strong upside move towards 80000, followed by 80700 in the short term.On the downside, the 20-day EMA region of 77,800-77,700 is expected to provide immediate support. A hold above this zone would help maintain the prevailing positive undertone, while a breach could lead to increased selling pressure.2.) Smallcap index rose nearly 3% this week, outperforming midcaps and largecaps. What's the strategy going ahead?The Nifty Smallcap 100 continued to outperform its midcap and largecap peers during the week, gaining nearly 3% and scaling a fresh all-time high. The index displayed strong relative strength and formed a robust bullish candle on the weekly chart, reflecting sustained buying interest across the broader market.A key technical development was the breakout above a horizontal trendline resistance, which signals a continuation of the prevailing uptrend. This breakout is backed by healthy price action and suggests that the smallcap segment could continue to attract investor interest in the near term.From a trend perspective, the index remains comfortably positioned above its key short and long-term moving averages, while momentum indicators and oscillators continue to maintain a positive bias. These signals indicate that the broader bullish structure remains firmly intact.Going ahead, the 19,550-19,500 zone will act as a crucial support area for the Nifty Smallcap 100. As long as the index sustains above 19,500, the positive momentum is likely to continue, with potential upside targets placed at 20100 and 20,400 in the short term.Investors and traders should maintain a buy-on-dips approach, with any decline towards the support zone being viewed as an opportunity to accumulate quality smallcap stocks.3.) What is the options data indicating about Nifty's near-term trading range, and where are the key Call and Put positions building up?For the entire week, Nifty consolidated within the 24,774–24,428 range, reflecting a phase of consolidation after witnessing a sharp pullback from the low of 23,606 in the last week of July.Looking at the options data, the 24,800 strike has witnessed aggressive Call writing, with Call open interest nearly 10 times higher than Put writing, making it a strong resistance zone.