The recent volatility in the stock market has sparked concern among traders, particularly with the Nifty index retesting the crucial 22,800 support zone. However, amidst these fluctuating conditions, there is a silver lining for market participants: the possibility that the market might be nearing a bottom. If the Nifty breaks above the 23,400 mark, it could signal the beginning of a bullish rally, with optimism mounting among traders and investors.
Amid this volatile backdrop, specific sectors are showing signs of strength, and one sector that stands out is the Nifty Service Sector.
The Nifty Service Sector is a diverse and crucial part of the Indian economy, encompassing various industries such as financial services, telecommunications, and IT services. With the market in flux, the service sector is poised for a potential reversal, presenting a potential opportunity for traders to position themselves.
Nifty Service Sector weekly chart
Source: Trade Point, Definedge Securities
A promising technical setup has emerged on the weekly chart of the Nifty Service Sector Index. The index has recently reversed from the 62-Week Exponential Moving Average (62WEMA) Channel, which has historically acted as a robust demand zone.
What is more encouraging is the behaviour of the King Oscillator, a proprietary indicator developed by Definedge. The King Oscillator has turned upward from the oversold zone, signalling a shift in momentum. The King Oscillator is derived from 14 key technical indicators, and its move from oversold conditions indicates that the momentum is shifting in favour of bulls.
Considering the historical significance of the 62WEMA Channel as a demand zone and the positive reversal in the King Oscillator, this could potentially be a prime time to accumulate stocks within the service sector.
Here are three service sector stocks you can add to your watchlist.
1. Bajaj Finance
Bajaj Finance, a leading player in the financial services space, has long been a favourite among investors due to its consistent growth and strong fundamentals.
Bajaj Finance weekly chart
Source: Trade Point, Definedge Securities
The stock has recently broken out of a 179-week consolidation pattern on the weekly chart. The number 179 is significant in the Fibonacci Time Cycle Theory, which attributes powerful breakout potential to stocks that break key Fibonacci time cycles.
This breakout suggests that Bajaj Finance could be poised for significant upside, and traders should look for further movement as the stock gains momentum.
2. Bharti Airtel Ltd
Bharti Airtel, one of the largest telecommunications companies in India, has been consolidating around the 62WEMA Channel, signalling that the stock is preparing for the next leg of its bullish trend.
Bharti Airtel daily chart
Source: Trade Point, Definedge Securities
The ascending triangle pattern on the daily chart is a particularly bullish formation, and its breakout suggests that Bharti Airtel may be on the verge of resuming its upward trajectory.
Further supporting this view is the range shift in the Relative Strength Index (RSI), a key momentum indicator. The RSI’s shift suggests that bullish pressure is building, and traders can expect the stock to break higher, potentially heading toward its all-time high. For traders seeking opportunities in the telecom sector, Bharti Airtel represents a solid pick with a strong potential for growth in the coming months.
3. Kotak Bank
Kotak Mahindra Bank, a major player in the banking sector, has been consolidating within a range of Rs. 1,600 to Rs. 2,000 for nearly four years. This extended period of consolidation has created a critical juncture for the stock. Notably, Kotak Bank has outperformed the Bank Nifty and Nifty50 indices since the start of 2025, signalling that it may prepare for a breakout.
A key development to watch is the golden cross formation on the daily ratio chart of Kotak Bank/Bank Nifty, which indicates that the stock is gaining strength relative to the broader banking sector.
Kotak Bank weekly chart
Source: Trade Point, Definedge Securities
On the weekly chart, Kotak Bank is nearing a breakout level above Rs. 2,030. A sustained close above this level could confirm the breakout, potentially sending the stock toward its all-time high of Rs. 2,253.
Given these technical signals, Kotak Bank is a stock that traders should watch closely. With its potential to break free from its consolidation range and outperform the broader market, Kotak Bank could be an excellent addition to any watchlist.
A time of opportunity amid volatility
While the market continues to experience volatility, sectors like the Nifty Service Sector are showing promising signs of a reversal. The stocks highlighted here—Bajaj Finance, Bharti Airtel, and Kotak Bank—all demonstrate a positive technical setup that suggests they could potentially be poised for growth shortly.
The time to act is now; with the right approach, you can capitalise on the opportunities presented by this market volatility. Stay focused, keep your watchlist updated, and remember that market corrections often lay the groundwork for the next phase of growth.
Disclaimer
Note: We have relied on data from http://www.definedgesecurities.com throughout this article. Only in cases where the data was unavailable have we used an alternate but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Brijesh Bhatia has over 18 years of experience in India’s financial markets as a trader and technical analyst. He has worked with the likes of UTI, Asit C Mehta, and Edelweiss Securities. Presently he is an analyst at Definedge.
Disclosure: The writer and his dependents do not hold the Stocks discussed in this article. However, clients of Definedge may or may not own these securities.
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