The Indian stock market entered a phase of consolidation during early trading on Friday, following a historic session where both the Sensex and Nifty 50 scaled unprecedented heights. This pause comes as traders engaged in profit-taking after the remarkable rally.
Record Highs and Market Consolidation
On Thursday, the domestic equity benchmarks celebrated a major milestone. The Sensex surged to a lifetime high of 86,055.86, while the Nifty 50 index hit a new peak of 26,310.45. However, the market opened on a cautious note the next day. The Nifty 50 began at 26,237.45, marking a modest gain of 21.90 points or 0.08%. Similarly, the Sensex started at 85,791.55, rising by 71.17 points, also 0.08%.
This period of consolidation was widely anticipated by market participants. Analysts noted that after such a powerful upward move, a phase of profit-booking is natural as investors look for clearer signals to determine their next steps. A critical point of observation is the activity of foreign investors, who remained net sellers on the day the records were broken, suggesting a need for continued vigilance.
Expert Technical Outlook on Nifty 50
Rajesh Palviya, Senior Vice President of Technical and Derivatives Research at Axis Securities, provided a bullish technical perspective. He stated that the Nifty 50 is in a strong uptrend on both daily and weekly charts, consistently forming higher tops and higher bottoms.
The index is trading comfortably above its 20, 50, 100, and 200-day Simple Moving Averages (SMAs), which reinforces a positive outlook. Palviya expects the current momentum to push the index towards the 26,500-26,700 range. He also views any short-term dip towards the 26,100-26,000 zone as a potential buying opportunity. The Relative Strength Index (RSI) on both daily and weekly timeframes remains in positive territory, indicating sustained strength.
Stocks to Watch: Three Promising Picks
Based on technical analysis, here are three stocks that experts believe investors should consider for their portfolios.
Samvardhana Motherson International Ltd (CMP: ₹116)
The stock has decisively broken through a key resistance level of ₹113, a zone that had held for the past year. Rising trading volumes over the last three weeks signal strong investor participation. It is positioned above all its key moving averages, and the appearance of a Bollinger Band buy signal points to growing momentum. The RSI is favourable across all time frames. The expected upside is ₹125-132, with a downside support zone of ₹113-110.
Coromandel International Ltd (CMP: ₹2,372)
This stock has confirmed a breakout from a down-sloping channel pattern at the ₹2,300 level, accompanied by rising volumes. It has also surpassed a multiple resistance level at ₹2,340, indicating a potential short-term trend reversal. A Bollinger Band buy signal and a positive RSI add to the bullish case. The price is expected to move towards ₹2,450-2,525, with support at ₹2,300-2,270.
Shriram Finance Ltd (CMP: ₹868)
Shriram Finance is in a powerful uptrend, demonstrated by its pattern of higher tops and bottoms. The stock recently achieved its own all-time high of ₹869, reinforcing bullish sentiment. It is trading well above its key SMAs, and a weekly Bollinger Band buy signal confirms the positive momentum. The RSI is strong across daily, weekly, and monthly charts. The projected upside is ₹900-950, with support located between ₹855-838.
Disclaimer: The views and recommendations are from individual analysts and not of Mint. Investors are advised to consult certified experts before making any investment decisions.
