The Indian equity market exhibited a cautious tone on Monday, December 15, with the benchmark Nifty 50 index closing 20 points lower at 26,027. The decline was attributed to profit booking in select heavyweight stocks amidst mixed signals from global markets. Analysts point to a combination of factors, including the rupee's weakness, persistent foreign institutional investor (FII) outflows, and lingering uncertainty surrounding an India-US trade deal, which have collectively kept the market in a tight range.
Market Outlook and Key Technical Levels
On the technical front, experts identify the level of 26,100 as a crucial resistance point for the Nifty. The index continues to face selling pressure below its all-time high of 26,326. For near-term stability, support is seen at the 25,693 mark. The market is poised for a muted start on Tuesday, with the Gift Nifty trading near 26,085, indicating a slight dip of 5.5 points or 0.02% from the previous close of Nifty futures.
Prashanth Tapse, Senior Vice President of Research at Mehta Equities Ltd., commented on the scenario. "While rate cuts by the RBI and the US Fed provide a supportive backdrop, near-term sentiment remains fragile given persistent FII outflows, a weakening rupee near ₹90.78/USD, and concerns over AI profitability," he stated. He added that with key US economic data scheduled for release this week, markets are likely to witness volatile, up-and-down sessions as investors maintain a cautious stance.
Expert Stock Recommendations for 1-2 Weeks
Given the prevailing cautious sentiment, market experts suggest focusing on stocks with robust fundamentals and positive technical indicators for short-term gains. Vishnu Kant Upadhyay of Master Capital Services and Hitesh Tailor of Choice Equity Broking have recommended five stocks for a holding period of the next one to two weeks.
Vishnu Kant Upadhyay's Picks
IDFC First Bank: Upadhyay highlights a decisive breakout from an ascending triangle pattern, indicating trend continuation. The stock is trading above its cluster of 20, 50, 100, and 200-day Exponential Moving Averages (EMAs). He recommends a target of ₹91-92 with a stop loss set at ₹79.
UPL: The analyst notes UPL is in a well-defined bullish trend, having broken out from a bullish pole and flag formation. It is trading above all key EMAs. The suggested target is ₹822, with a stop loss at ₹729.
BPCL: This stock has broken out from a consolidation range on the daily chart, supported by good volume. Upadhyay sees potential for the uptrend to extend towards ₹394 and ₹410. Investors should place a stop loss at ₹346.
Hitesh Tailor's Picks
NMDC: Tailor points out that NMDC is consolidating after a recent upward move, finding support near its rising trendline aligned with the 100-day EMA. The Relative Strength Index (RSI) at 70.45 shows strong momentum. The target is ₹85 with a stop loss at ₹75.
Indian Oil Corporation (IOC): IOC is trading above all key moving averages, reflecting a strong bullish structure. The RSI at 65.41 indicates healthy momentum. Tailor advises a target of ₹185 and a stop loss of ₹160.
UPL (Second View): Echoing a positive view, Tailor also recommends UPL, noting it has resumed upward momentum after finding support. With the RSI at 64.34, he sets a target of ₹825 and a stop loss at ₹730.
Conclusion: Navigating a Range-Bound Market
In summary, the Indian stock market is navigating a phase of consolidation and caution, influenced by both domestic and global factors. While the broader trend faces resistance near its peak, specific stocks are showing independent strength based on their technical chart patterns and fundamental positioning. The recommendations from experts provide a focused list for traders looking at a short-term horizon, emphasizing the critical importance of adhering to the specified stop-loss levels for disciplined risk management in a volatile environment.
