The Indian equity market concluded another week on a negative note, with the benchmark Nifty 50 index extending its weekly losing streak to three consecutive weeks. For the week ending Friday, December 19, the Nifty 50 declined by 0.31%, although it managed to post a single-day gain of 0.58% to close at 25,966.40. On a monthly basis, the index is down approximately 1%, poised to break its three-month winning run.
Market Outlook: Consolidation with a Cautiously Bullish Tone
Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, described the past week as featuring choppy but constructive price action. He noted that market dips were quickly bought into, and selling pressure did not intensify significantly. The Nifty settling around the 25,950 level with minimal change indicates a phase of high-level consolidation rather than a trend reversal.
Patel emphasized that the index maintains a cautiously bullish stance. The support zone between 25,700 and 25,800, which aligns with a rising trendline, has held firm. Currently, price action is concentrated near the 25,900–26,000 range. The immediate resistance lies at 26,020–26,080. Analysts suggest that a decisive breakout above this level, supported by strong volume, could confirm an inverse head-and-shoulders pattern on hourly and daily charts, potentially opening the path towards 26,300–26,600.
"As long as the 25,600–25,700 band holds on a weekly closing basis, the primary uptrend remains intact," Patel stated. He also pointed out that the larger multi-year cup-and-handle chart pattern is still valid, supporting expectations of a gradual upward move extending into early 2026.
Three Short-Term Stock Picks from an Expert
For investors with a horizon of one to two weeks, Jigar Patel has recommended three stocks based on technical analysis. Here are the detailed picks:
CEAT Ltd: Targeting a Rebound
CEAT's stock, which previously closed at ₹3,931.70, has undergone a correction of nearly 17.6% from its recent high of ₹4,438, bringing it to the ₹3,930–3,900 zone. This area coincides with the 50% Fibonacci retracement level of its prior rally, suggesting a potential demand zone. Technical structure shows signs of stabilization, with early indications of a falling trendline breakout visible on both price and the Relative Strength Index (RSI). Trading volumes have normalized post-correction.
Patel's strategy: Accumulate in the ₹3,950–3,900 range. Maintain a stop-loss at ₹3,765 on a daily closing basis. The near-term target price is ₹4,300.
Endurance Technologies: Poised for a Comeback
Endurance Technologies corrected about 14.5% from its peak of ₹2,986 and is now trading near ₹2,685. The current price zone offers layered technical support, aligning with the 38.2% Fibonacci retracement, the 200-day exponential moving average (DEMA), and a previous breakout area. Bullish signals are emerging, including positive divergence on the RSI and MACD indicators, hinting at weakening downward momentum.
Patel's strategy: Consider accumulation within the ₹2,700–2,660 band. A stop-loss should be placed at ₹2,545. The expected rebound could take the stock to the target range of ₹2,900–2,950.
Shyam Metalics and Energy: A Potential Reversal Setup
Shyam Metalics has been under pressure for two to three months, declining nearly 22% from its recent high of ₹988 to the ₹818–810 support region. This pullback has improved the risk-reward profile. Technically, an early trendline breakout suggests selling pressure may be easing. The RSI has reclaimed its falling trendline and shows bullish divergence, indicating possible downside exhaustion.
Patel's strategy: Traders can look to accumulate shares in the ₹820–810 range. A strict stop-loss of ₹775 on a daily closing basis is advised. The potential upside target is around ₹895.
Key Takeaways for Traders
The broader market is in a consolidation phase with key support levels holding strong. While the short-term trend appears range-bound, the primary uptrend remains unchallenged according to the expert. For active traders, the three stocks identified by Jigar S. Patel present short-term opportunities based on technical pullbacks to support zones and early reversal signals. As always, investors are advised to consider their risk appetite and consult with certified experts before making any investment decisions, as market conditions can change rapidly.
