As the year draws to a close, investment advisory platform MarketSmith India has identified two stocks for investors to consider on Monday, 29 December. This comes after a week where the Indian equity benchmarks managed to snap their losing streaks, albeit ending the final trading session of the week in the red.
Market Recap: Indices Snap Weekly Losing Streak
The Indian stock market witnessed a subdued session on Friday, 26 December. The benchmark indices closed lower amid thin year-end trading volumes and a lack of fresh positive triggers. The Sensex declined by 367 points, or 0.43%, to settle at 85,041.45. Similarly, the Nifty 50 dropped 100 points, or 0.38%, to close at 26,042.30. The broader market also saw pressure, with the BSE Midcap and Smallcap indices falling 0.18% and 0.34%, respectively.
Despite the Friday dip, the weekly picture showed a modest recovery. For the week ended 26 December, the Sensex edged up by 112 points (0.13%), breaking a two-week fall. The Nifty 50 rose by 0.30%, ending a three-week slide. The overall market capitalization of firms listed on the BSE dipped slightly to approximately ₹474 trillion.
MarketSmith India's Stock Picks for 29 December
Focusing on individual opportunities, MarketSmith India, which employs the CAN SLIM methodology pioneered by William J. O'Neil, has recommended two buy ideas for the trading day.
1. Steel Authority of India Ltd (SAIL)
The current market price of SAIL is around ₹132. The recommendation is based on several fundamental strengths. The company benefits from strong government backing as a Public Sector Undertaking (PSU) and holds strategic importance in the nation's infrastructure growth. As an integrated steel manufacturer with captive iron ore mines, it is a direct beneficiary of India's ongoing infrastructure and capital expenditure cycle. The firm has also been working on cost-reduction measures and boasts an established domestic market presence.
From a technical perspective, the stock is seen to have support near its 200-day moving average. MarketSmith India suggests a buy range between ₹131 and ₹133, with a target price of ₹150 over a two to three-month horizon. Investors are advised to place a stop loss at ₹125.
Key metrics for SAIL include a P/E ratio of 21.10 and a 52-week high of ₹145.90. The recommendation also outlines risk factors such as the cyclical nature of steel demand, global commodity price volatility, and government influence on pricing.
2. Capital India Finance Ltd
This stock is trading at approximately ₹38.50. The primary reasons for the recommendation are the company's expanding retail and MSME (Micro, Small, and Medium Enterprises) lending operations and its improving asset quality and balance sheet strength. Technically, the stock is showing a trendline breakout signal.
The advisory suggests entering the stock in the ₹38.30 to ₹38.60 range. The set target price is ₹47 within two to three months, with a stop loss positioned at ₹36. The stock's 52-week high is ₹144.50. Potential risks involve sensitivity to asset quality and funding cost fluctuations.
Technical Outlook and Market Status
Despite the recent consolidation, the broader market trend remains classified as a "Confirmed Uptrend" according to O'Neil's methodology, as the Nifty 50 has surpassed its previous rally high. The index continues to hold above the key 26,000 level and its 21-day moving average.
Analysts note that a decisive close above 26,300 could open the path towards the 26,500–26,700 zone. On the downside, 25,700 and 25,300 are crucial support levels to watch. The Nifty Bank index faced selling pressure, forming three consecutive bearish candles and trading below its 21-day moving average, indicating near-term caution. Its immediate resistance is seen in the 59,800-60,100 band.
Disclaimer: The views and recommendations are those of the advisory service. Investors are advised to consult certified experts before making any investment decisions.
