Nifty Surges Past 26,000; Midcaps Poised for Growth Amid Sector Shift

The Nifty index has surpassed the **26,000** mark for the first time in nearly a year, edging closer to its all-time high. Market sentiment remains optimistic, with traders anticipating a potential trade deal with the United States. In an interview with ET Now, market analyst **Rahul Sharma** indicated that the Nifty could soon reach its previous peak, possibly within the next few days.

Sharma emphasized that the markets are beginning to factor in the implications of a US trade agreement. “We may see a classic buy on rumour, sell on news scenario,” he explained. “Profit booking could occur on the day the deal is announced.” Until then, he believes the market will maintain its upward trajectory, buoyed by ongoing speculation. “As long as we do not have an official announcement, the trickle of information will keep investor confidence high,” he added.

Sector Rotation and Midcap Focus

With the Nifty crossing the psychological threshold of **26,000**, Sharma noted that a close above this level could pave the way for reaching **26,277**, the previous all-time high. He advised investors to capitalize on current market conditions but prepare for a shift in focus from large-cap stocks to mid-caps once the US trade deal is finalized. “Our big bet today is on the midcap space,” he stated.

He observed that while large-cap stocks may experience profit booking, the midcap indices are exhibiting strong technical formations. “The midcap 100 index shows a cup and handle pattern, suggesting a potential rally ahead,” he explained.

On the banking front, Sharma mentioned that the Bank Nifty has been performing well but appears to be in an overbought state. “Given the RSI indicators on both daily and hourly charts, it’s not advisable to take fresh positions right now,” he cautioned. “However, if a dip occurs, that could present a solid re-entry point.”

Investment Recommendations

When discussing specific midcap opportunities, Sharma highlighted **GMR Airports** and **KFin Technologies**. He stated that GMR Airports is at a crucial juncture, with a breakout expected above **95**. He anticipates this stock could outperform its peers, with targets set at **120** over the next three to four months. Investors are advised to buy at current levels with a stop loss at **85**.

Sharma also sees potential in KFin Technologies, which has established a solid base around the **1,050** to **1,100** range. He noted that recent price action suggests the stock may be on the verge of breaking out from its current consolidation, with targets around **1,200** to **1,240**. He recommends buying KFin Tech now, with a stop loss at **1,110**.

Turning to the IT sector, which has shown recovery, Sharma remarked, “The IT index has been the underdog for a long time, but it is finally gaining some traction.” He identified **Infosys** as a standout performer, noting its strong quarterly results and positive price action. “The next target for Infosys is around **1,600** to **1,620**,” he indicated. He advises potential buyers to consider entering at **1,520**, with a stop loss at **1,500** for a potential **5% to 6%** gain.

As the Nifty approaches new heights, Sharma’s advice to investors is clear: “Enjoy the rally while it lasts, stay selective, and keep an eye on the midcap space for the next phase of market leadership.”