As Indian equity benchmarks paused after a record-breaking rally, research platform MarketSmith India has identified two stocks for investors to consider on Thursday, 19 December. The recommendations come after a flat-to-negative session for the market on 18 December, where key indices lacked clear directional momentum.
Market Recap: Indices Consolidate Amid Lack of Triggers
On Wednesday, 18 December, the domestic stock market ended with a slight negative bias. The benchmark Sensex closed 78 points, or 0.09%, lower at 84,481.81. The broader Nifty 50 settled almost flat at 25,815.55, down just 3 points or 0.01%. The session was marked by caution as investors awaited fresh triggers.
Performance across market segments was mixed. The BSE Midcap index eked out a minor gain of 0.05%, while the Smallcap index declined by 0.28%. Sectorally, IT stocks like Infosys, TCS, and Tech Mahindra provided crucial support to the Sensex. Conversely, heavyweight stocks such as HDFC Bank, Sun Pharma, and Bharti Airtel exerted pressure on the index.
Detailed Stock Recommendations for 19 December
MarketSmith India, which follows the CAN SLIM methodology pioneered by William J. O'Neil, has suggested a buy call on two companies for today's trading session.
1. Shriram Finance Ltd (Current Price: ₹865)
Buy Range: ₹855–870
Target Price: ₹975 (in 2-3 months)
Stop Loss: ₹810
The advisory firm highlights several strengths for this non-banking financial company (NBFC). Shriram Finance boasts a strong presence in used commercial vehicle and MSME lending. It has demonstrated consistent growth in Assets Under Management (AUM) backed by a diversified loan book. A high-yield asset portfolio supports strong Net Interest Margins (NIMs), and the company has shown improving asset quality with declining Gross and Net Non-Performing Asset (GNPA/NNPA) trends.
Other positive factors include robust capital adequacy, healthy provisioning buffers, and the experienced management of the Shriram Group. The recent group restructuring also opens up potential for cross-selling opportunities.
Key Metrics: P/E Ratio: 19.11 | 52-Week High: ₹876.90 | Volume: ₹1,086.96 crore.
Technical View: The stock is trending above all its key moving averages, with bullish momentum intact.
Risk Factors: Investors should note the company's high exposure to the self-employed and informal sector, making asset quality sensitive to economic cycles. Other risks include elevated credit costs during a macroeconomic slowdown, intense competition from banks and other NBFCs, interest rate volatility, dependence on the cyclical vehicle finance industry, and potential regulatory changes impacting NBFCs.
2. Canara HSBC Life Insurance Co. Ltd (Current Price: ₹127.50)
Buy Range: ₹126–128
Target Price: ₹142 (in 2-3 months)
Stop Loss: ₹121
The recommendation for this life insurer is based on its strong bancassurance network, fortified by long-term partnerships, and a diversified product mix that spans protection and savings segments.
Key Metrics: P/E Ratio: N/A | 52-Week High: ₹128.30 | Volume: ₹19.50 crore.
Technical View: The stock has shown a downward sloping trendline breakout on its charts.
Risk Factors: The primary risk identified is the company's high dependence on bancassurance channels for distribution. Regulatory and policy changes in the insurance sector also pose potential challenges.
Technical Outlook for Key Indices
The Nifty 50 extended its consolidation phase on 18 December, closing marginally below its 50-day moving average (50-DMA). This indicates a mild softening in short-term momentum. Key momentum indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) also reflect a loss of bullish steam. According to MarketSmith's analysis, the market status remains in a "Confirmed Uptrend," but the index needs a decisive close above 26,300 to reignite a strong rally towards the 26,500–26,700 zone.
The Nifty Bank index displayed weakness, forming its third consecutive bearish candle. It closed below the 59,000 mark at 58,912.85. While the pullback is seen as healthy within the broader uptrend, the index requires a close above its 21-DMA to restore bullish momentum convincingly. The 58,800–58,000 range is viewed as a crucial support zone.
MarketSmith India is a SEBI-registered research and advisory platform (SEBI Registration No.: INH000015543). The views and recommendations are those of the individual analyst. Investors are advised to consult certified experts before making any investment decisions.
