F&O Talk: 22,600 is a key Nifty support; Sudeep Shah discusses PB Fintech, Infosys, TCS strategy ahead of Q2

Analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, interacted with ETMarkets regarding the outlook for the Nifty, options data, and an index strategy for the upcoming week. The following are the edited excerpts from his chat

The Indian stock market has just set a record, but not one investors hoped for. Dalal Street has logged losses for eight consecutive weeks, surpassing the streaks seen during the 2020 Covid-19 crash and the 2008 global financial crisis. Axis has picked 7 largecap stocks that have robust value after the sharp correction.

Analyst Sudeep Shah, Vice President and Head of Technical & Derivatives Research at SBI Securities, interacted with ETMarkets regarding the outlook for the Nifty, options data, and an index strategy for the upcoming week. The following are the edited excerpts from his chat:

1.) Nifty has ended lower for 8 weeks straight for the first time in 25 years. How have markets behaved in such scenarios? Can we see another week of selling pressure?Nifty has ended lower for eight consecutive weeks for the first time in 25 years. Such prolonged losing streaks are extremely rare. Since 1992, there have been only six earlier instances, with the longest stretches being eight weeks in 1993 and nine weeks in 2001.

Historically, the end of such losing streaks has generally been followed by a rebound. Across the six instances, Nifty delivered an average return of around 11% in one month, 12% in three months, 14% in six months and 39% in twelve months. One-month and twelve-month returns were positive in all six cases, while three-month returns were positive in five and six-month returns in three instances. The median 12-month return was around 23%, providing a more balanced reference than the average, which was boosted by the exceptional 91% and 81% gains following the 1993 and 2020 episodes.

However, the historical circumstances were very different. The 2008 episode is particularly relevant as crude was near $145, inflation was elevated and the global financial crisis was unfolding. Nifty initially gained 9.5% in one month after the losing streak ended but subsequently declined around 10% over three months and 22% over six months.

The current setup has some similarities, with elevated crude, Strait of Hormuz-related disruption, rising global yields and persistent FII outflows. However, Nifty's decline of around 8.74% over the past eight weeks is much lower than the roughly 22% decline in the comparable phase of 2008 and 33% in 2020.

Hence, another week of selling pressure remains possible. The end of the losing streak does not necessarily signal the end of the broader downtrend. The 22,600-22,400 zone will be crucial. A sustained hold could trigger a pullback, while a decisive breakdown would increase the risk of another leg lower.

2.) What is your view on Nifty and key levels for the coming week?The 22,150-22,100 zone will remain the crucial support area, while 22,550-22,600 will act as the immediate hurdle. The reaction around these two zones could determine whether Nifty gets a breather or selling pressure resumes.

How are FIIs positioning themselves in the October series as their index shorts hit a six-month high?

FIIs have offloaded Rs 43,687 crore in just six trading sessions, with outflows accelerating over the past three sessions. Their index futures long-short ratio has declined to 8.01%, near the lower end of its historical range.

The ratio had fallen to 5.98% on September 30, 2025, after which Nifty rallied around 7.5% before reaching its January 2026 high of 26,373. Such extreme positioning can create the potential for sharp short covering.

However, the current setup is different. Since July 2025, the FII long-short ratio has largely remained within a 5-21% range, with no sustained improvement. A strong US dollar, elevated DXY and US bond yields above 5% could continue to deter foreign investors and keep FII selling as an overhang.

Therefore, while extreme short positioning leaves room for a sharp rebound through short covering, a sustained recovery would likely require improvement in the global macro backdrop.

3.) IT stocks bounced back towards the end of Friday. How are the charts looking after Accenture's earnings?Despite the recent bounce, Nifty IT's broader structure remains weak. The index continues to trade below key daily and weekly moving averages, while rising ADX indicates strengthening bearish momentum. MACD remains below zero and continues to slope downward, while the index remains in the Lagging quadrant of the RRG.

The 28,800-28,850 zone will act as immediate resistance, with the bearish bias likely to persist below this level. On the downside, 27,650-27,600 is the key support; a decisive break could extend the weakness.

4.) Can you share a strategy for PB Fintech, Bajaj Auto, Infosys and TCS?

PB Fintech: The stock has corrected nearly 48% in six sessions, significantly weakening its chart structure. MACD has slipped below zero with rising red histogram bars. The bearish bias is likely to remain intact below Rs 1,150-1,200.

Bajaj Auto: The stock declined 7.62% and closed below its 200-day EMA for the first time since April 2026. RSI at 22 and widening DI lines indicate strong bearish momentum. The Rs 10,400-10,450 zone is the immediate resistance; the bias remains weak below this zone.

Infosys: The stock has bounced from the Rs 985-980 support zone. Sustaining above this area could allow the pullback to extend, while a decisive break below it would indicate further downside. A stronger trend reversal is likely only above its 20-week EMA around Rs 1,100-1,120.

TCS: The stock remains significantly below its key moving averages. Rising ADX and RSI below 40 indicate strengthening bearish momentum. The Rs 2,140-2,150 zone is the immediate resistance, with the bearish bias intact below this level.

5.) What is your view on India VIX after a 27% surge in one month?India VIX has rebounded nearly 55% from its September 1 low of 9.24 and has broken above a downward-sloping trendline. It is now marginally above its 200-day EMA, while Nifty's IV percentile is around 72%, indicating volatility is towards the higher end of its historical range.

The 11.8-11.5 zone is the immediate support, while 15.2-15.5 remains key resistance. A sustained move above 15.5 could trigger another rise in volatility and keep equities under pressure. In this environment, debit spreads may be preferred over credit spreads because of their defined-risk profile.