Nifty 50 and Sensex closed the year 2025 higher by 10.5 per cent and 9.1 per cent respectively. Indeed, the benchmark indices began the year on a weak note. Both the indices fell about 7 per cent each in the first quarter of the year. However, both the Nifty and Sensex witnessed a strong rise thereafter, recovering all the loss.

While the Sensex and Nifty struggled to stage a strong rally last year, some sectors clearly outperformed the benchmark indices. The BSE Metal and BSE Auto index were the clear winners of the race in 2025. The BSE Metal index surged 27 per cent and the BSE Auto index was up 21 per cent. The BSE Private Bank and BSE Financial Services index come next with a 17 per cent and 16 per cent rise last year.

When there are outperformers on one side, there will always be some underperformers on the other. In 2025, the BSE Realty and the BSE Information Technology were sectors that were beaten down badly. These sector indices were down 17 per cent and 15 per cent respectively.

2025 outlook: A recap

In the Big Story section of bl.portfolio edition dated January 19, 2025, we had given a buy for BSE Metal and BSE Financial Services. The indices were at 28,207 and 10,900 respectively at the time of writing then. The BSE Metal index closed 2025 at 36,811 and the BSE Financial Services ended the year at 13,174. The indices were up 31 per cent and 21 per cent from the time of giving the outlook.

Similarly, the BSE IT index was at 41,747 then. We had asked the investors to hold with caution and keep a stop-loss at 39,800. The cautious approach paid off, as the index tumbled to a low of 30,458 by April last year.

As an investor, it is always wise to seek opportunities beyond the benchmark indices. So, here we are again with our analysis to highlight sectors that present an opportunity for investment in the new year.

Methodology

We have picked four sectors that can possibly outperform this year. As always, we have used the technique of Technical Analysis to filter the sectors. Technical Analysis is a method of forecasting using charts and historical price movement. No fundamental factors are considered here. The sector’s outlook based on fundamental factors can vary.

We have picked two stocks from each of the four sectors that can be considered for investing. Exchange Traded Funds (ETFs), wherever available, have also been given. Again, these stocks are selected purely based on charts and technical analysis. The support, target and stop-loss mentioned from the sector index can be used as a substitute for the entry and exit levels of stocks.

For example, if we had mentioned buying the sector index at, say, 100 and 80, then the stocks and ETFs given can be bought when the index reaches the above-mentioned levels. When the index reaches the target levels mentioned, investors can exit/book profits from the respective ETFs and stocks that are bought. Similarly, if the stop-loss or the revised stop-loss given for the index is reached, then investors should accept the loss or the small profit in hand and exit the stock or ETF bought.

To sum up, the buy, stop-loss and target levels mentioned for the index are the levels at which the stocks, ETFs have to be bought and sold.

For analysis, considering the wide range of data availability, we have taken the sectors from the BSE. However, going by the same logic explained above, the levels for the BSE sector index can be applied for the Nifty ETFs mentioned in the sectors, wherever they are available.

Additionally, investors have to do their own due diligence before investing in the stocks mentioned here. Risk management is a must. The stop-loss levels mentioned for the sector indices have to be strictly adhered to. This will aid in minimising the loss in case our view goes wrong.

BSE IT (36,795)

The index recovered well after tumbling about 30 per cent in the first few months of 2025. After this bounce, the index has been getting very good support around 33,000. The region around 39,500 is a crucial resistance for the index. A decisive break above 39,500 will be very bullish. Such a break could see the BSE IT index rallying towards 49,500 by the end of this year.

Key support to watch is the 33,000-32,850 region and then 31,500. This bullish view will go wrong only if the index breaks below 31,500. If that happens, then the BSE IT index will come under the danger of tumbling towards 27,000.

But such a fall looks less likely, as a break below 31,500 will need some strong negative trigger.

Strategy: Investors can buy now at 36,795. Accumulate on dips at 34,600. Keep the stop-loss at 30,600. Trail the stop-loss up to 39,200 as soon as the index goes up to 42,300. Revise the stop-loss higher to 41,600 and 44,400 when the index touches 44,500 and 46,800 respectively. Exit the long positions at 49,500.

Stocks to watch: HCL Technologies, Persistent Systems

ETF: ICICI Prudential Nifty IT ETF, Kotak Nifty IT ETF

BSE Telecommunication (3,065)

The downtrend from the high of 3,348 (September 2024) halted at 2,440 (March 2025). From there, the index has risen back very well. The price action on the monthly chart indicates that the index is not getting strong sellers to drag it below the 21-Month Moving Average (MMA). This 21-MMA is currently at 2,947. A strong trend-line support is around 2,840. As long as the index stays above these supports, the bias will remain positive. A much lower support is around 2,730.

Key resistances are at 3,230 and 3,450. We expect the BSE Telecommunication index to break these hurdles and rise to 3,800 this year. From a multi-year perspective, the index has the potential to see much higher levels in the coming years.

A break below 2,840 will be the first sign of bearishness. A subsequent fall below 2,730 will confirm the same and indicate that our bullish view has gone wrong. In that case, the outlook will turn negative for a fall to 2,430-2,400 and even lower.

Strategy: Investors can go long now at 3,065. Accumulate on dips at 2,980. Keep the stop-loss at 2,680. Trail the stop-loss up to 3,220 when the index goes up to 3,380. Revise the stop-loss higher to 3,420 and 3,650 when the index touches 3,580 and 3,730 respectively. Exit the long positions at 3,800.

Stocks to watch: Bharti Airtel, Tata Communication

BSE Consumer Durables (61,498)

The index has recovered very well after making a low of 49,772 in April last year. The price action over the last few months indicates that the index is losing momentum. It is also facing resistance at around 63,000.

Immediate support is at 59,200. A strong long-term trend-line support is at 56,000. An intermediate dip to 56,000 is still a possibility. But that will give a very good buying opportunity.

On the charts, the bias is bullish as long as the index stays above 56,000. The long-term uptrend will remain intact. We expect the index to break 63,000 and rise to 77,000.

The uptrend will come under threat only if the index declines below 56,000. That will turn the outlook bearish and drag the index down to 50,000-49,000.

Strategy: Investors can buy now at 61,498. Accumulate on dips at 58,200. Keep the stop-loss at 53,200. Trail the stop-loss up to 62,800 as soon as the index goes up to 65,700. Revise the stop-loss higher to 66,800 and 71,200 when the index touches 68,800 and 73,500 respectively. Exit the long positions at 77,000.

Stocks to watch: Voltas, Titan

BSE Energy (11,749)

Structurally, the index has been in a strong uptrend. The index has found strong support in the 10,000-9,600 region. The price action in the first half of 2025 indicates that the index has got strong buyers in this support zone.

Immediate support is at 11,250. We can expect the index to sustain above this support itself. Resistance is at around 12,600. A break above this resistance can take the index up to 14,000 initially. An eventual break above 14,000 will see the BSE Energy index targeting 16,500 on the upside this year.

The index has to fall below the psychological level of 10,000 to give an initial sign of trend reversal. A subsequent fall below 9,800 will confirm the same and drag the BSE Energy index down to 9,000.

Strategy: Investors can buy now at 11,749. Accumulate on dips at 10,700. Keep the stop-loss at 9,200 initially. Revise the stop-loss higher to 12,700 when the index goes up to 13,400. Move the stop-loss higher to 13,800 and 15,200 when the index touches 14,600 and 15,800 respectively. Exit the long positions at 16,500.

Stocks to watch: ONGC, IOCL

ETF: Mirae Asset Nifty Energy ETF, Motilal Oswal Nifty Energy ETF

Published on January 10, 2026