The Indian stock market's key benchmark indices extended their losing streak for the fourth consecutive session this week, reflecting persistent weakness. However, a glimmer of recovery emerged as the Nifty 50 index managed to rebound from an intraday low of 25,726 to touch a high of 25,863. This bounce provided some relief to the bulls, especially as the index held above the crucial 50-day Exponential Moving Average (DEMA) support, positioned around the 25,750 mark. Mirroring this movement, the Nifty Bank Index also staged a strong recovery, climbing from its low of 58,712 to reclaim the psychologically important 59,000 level.
Market Outlook: Cautious Sentiment Prevails
Nagraj Shetti, Senior Technical Research Analyst at HDFC Securities, pointed out that the overall market sentiment remains weak. He identified a significant resistance zone for the Nifty 50 index between 25,850 and 25,900 levels. "Nifty continued to show weakness for the fourth consecutive session," Shetti observed on Thursday, noting the index was trading lower by about 35 points. He highlighted that a negative chart pattern, marked by the formation of lower tops and bottoms, is still active on the daily chart.
According to his analysis, the current decline could be part of the process to establish a new lower bottom in the short term. Shetti advised investors to watch the next key support band at 25,650-25,600. He also cautioned that any potential bounce from current levels is likely to encounter a strong hurdle in the 25,850-25,900 range, reinforcing the need for a cautious approach in the market.
Nagraj Shetti's Specific Stock Recommendations
In this uncertain environment, Shetti has provided clear buy and sell recommendations for two specific stocks, with a short-term horizon of one to two weeks.
Birlasoft: A Buy Call for Upside Potential
Shetti recommends buying shares of Birlasoft at ₹437.75. He has set a price target of ₹462 for this IT stock, with a stop loss at ₹424 to manage risk. His analysis indicates that after a strong upward move in early December, Birlasoft entered a phase of range-bound trading with a positive bias. The stock is now poised at the edge of a breakout from the ₹435 to ₹440 levels.
The technical setup appears bullish, with the stock price trading above both its 10-day and 200-day EMA supports. This overall chart structure, according to Shetti, signals a high probability of further upside in the stock's price in the near term.
Fortis Healthcare: A Sell Recommendation Amid Downtrend
Conversely, Shetti advises selling shares of Fortis Healthcare at ₹859. For this trade, he suggests a target price of ₹820 and recommends placing a stop loss at ₹885. His technical assessment points to a stock that has been in a sustained downtrend over the past several months.
The daily chart confirms a bearish pattern of lower tops and bottoms. Shetti notes that a recent bounce from the support of the 200-day EMA has concluded, and the stock price has reversed downwards after forming a lower top. This overall negative chart pattern suggests that the stock is likely to experience further weakness in the coming sessions.
Disclaimer: This information is for educational purposes only. The views and recommendations are those of the individual analyst and not of Mint. Investors are strongly advised to consult with certified experts before making any investment decisions.
