Indian Markets Extend Gains for Third Consecutive Day
Indian equity markets delivered a robust performance for the third straight session on Wednesday, driven by a powerful convergence of positive domestic and global factors. The benchmark Nifty 50 index rallied 180.85 points (0.70%) to settle at 25,875.80, while the Sensex jumped 595.19 points (0.71%) to close at 84,466.51.
This strong upward movement was underpinned by positive investor sentiment following exit polls predicting a decisive majority for the ruling NDA in the crucial Bihar elections, suggesting continued political stability. Concurrently, global risk appetite improved significantly amid hopes of an imminent resolution to the prolonged US government shutdown, which eased investor anxieties and boosted capital inflows into emerging markets.
Ongoing optimism about the early finalisation of the India-US trade deal further boosted market sentiment. On the sectoral front, IT and Auto sectors led the charge, with the advance-decline ratio at the NSE remaining strongly positive at around 2.24:1, indicating broad-based buying momentum across the market.
MarketSmith India's Top Stock Recommendations
Buy: Garden Reach Shipbuilders & Engineers Ltd
MarketSmith India has recommended buying Garden Reach Shipbuilders & Engineers Ltd at its current price of ₹2,816. The stock presents an attractive investment opportunity with a recommended buying range of ₹2,800-2,840, target price of ₹3,290 in two to three months, and stop loss at ₹2,660.
The company's strong fundamentals include a healthy order book from defence and government sectors, consistent revenue growth, and improving profit margins. Garden Reach maintains a robust balance sheet with low debt levels and benefits from the government's focus on naval modernization and indigenization.
Key metrics for the stock include a P/E ratio of 51.77, 52-week high of ₹3,538.40, and trading volume of ₹636.23 crore. From a technical perspective, the stock has reclaimed its 100-day moving average on above-average volume.
However, investors should note potential risk factors including high dependency on government contracts, possible project execution delays and cost overruns, limited export exposure and customer concentration, raw material price fluctuations impacting margins, policy or budgetary changes in defence spending, and competitive pressure from other public and private shipyards.
Buy: The South Indian Bank Ltd
MarketSmith India's second recommendation is The South Indian Bank Ltd at its current price of ₹39.28. Investors can consider buying in the range of ₹39.20-39.40 with a target price of ₹46 in two to three months and stop loss at ₹37.90.
The bank demonstrates strong fundamentals with its focus on retail and MSME lending and a digital-first model that boosts distribution while reducing reliance on physical branches. The institution has shown significant improvement in asset quality over recent years.
The stock trades at an attractive P/E ratio of 7.47 and is approaching its 52-week high of ₹40.30. Trading volume stood at ₹203.33 crore. Technically, the stock has shown a bullish flag breakout pattern.
Key risk factors include a relatively lower CASA ratio and higher dependence on wholesale/fixed deposits compared to larger peers, leading to higher funding costs.
Market Technical Analysis and Outlook
The Nifty 50 index demonstrated strong technical positioning on Wednesday. Price action shows a decisive breakout above a short-term consolidation zone, supported by sustained buying interest and rising volumes, indicating renewed bullish sentiment. The index is now trading comfortably above all its key moving averages.
The RSI is currently near 61, trending higher after rebounding from the midline, suggesting strengthening momentum without entering overbought territory. This upturn in RSI aligns with improving market breadth and a pickup in cyclical sector participation.
Meanwhile, the MACD has generated a bullish crossover above the signal line, confirming a shift in momentum toward buyers. The histogram has also turned positive, reflecting increasing upside traction.
According to O'Neil's methodology of market direction, the market status has shifted to a "Confirmed Uptrend" as it decisively surpassed its previous rally high of 25,670 to register a new 52-week high. The index ended on a positive note, reclaiming both its 21-DMA and 25,700, indicating renewed buying momentum.
A sustained move above 25,700 could open the door for an advance toward 26,000-26,100 in the near term. On the downside, immediate support is placed at 25,700, while a stronger base around 25,300 continues to underpin the broader uptrend and maintain overall market stability.
Nifty Bank Performance
The Nifty Bank opened with a gap-up and maintained a positive trajectory throughout the session. It formed its fourth consecutive bullish candle on the daily chart and continues to trade well above all its key moving averages, indicating strong upward momentum.
The index opened at 58,505.35, touched an intraday high of 58,507.70, and a low of 58,171.85, before closing at 58,274.65, reflecting renewed buying interest and strengthening bullish sentiment.
The momentum indicator RSI has slightly moved upward and is currently positioned around 65, indicating a neutral yet resilient undertone in market momentum. Meanwhile, the MACD has given a negative crossover, suggesting short-term consolidation, though it continues to trade above the central line, reflecting underlying strength.
According to the O'Neil methodology for assessing market direction, the index remains in a Confirmed Uptrend, and the broader market structure continues to favour bullish sentiment and potential upside. The index continues to trade decisively above all its major moving averages, highlighting strong underlying momentum.
As long as it sustains above the 21-DMA, currently around 57,770, the outlook remains positive. A sustained move beyond this level could open the path for an extended rally toward 58,600–59,000 in the near term. On the downside, immediate support lies between 57,600 and 57,000, and a breach below this range may lead to a short-term corrective phase.
MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O'Neil. Trade name: William O'Neil India Pvt. Ltd. Sebi Registration No.: INH000015543
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
