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Market Navigates Volatility, Selective Buying Emerges
Indian equities traded with considerable volatility on Wednesday, ultimately closing marginally lower. The Nifty 50 settled at 25,665.60, down 0.26%, fluctuating within a tight range throughout the session. Mixed sectoral performance saw metals and energy stocks display resilience, while technology and real estate stocks lagged. This rotation hints at caution, although broader indices showed signs of bouncing back from oversold territory, indicating pockets of selective buying interest.
Persistent foreign institutional selling and escalating geopolitical and trade uncertainties continue to weigh on market sentiment, suppressing overall risk appetite. Initial optimism around key support levels and trade discussions offered some respite, but a lack of sustained follow-through buying, coupled with macro concerns, has confined the market to a stock-specific trading environment.
Technical Outlook and Strategy
Technically, bulls are defending the 100-day exponential moving average (EMA) around the 25,600 mark for the Nifty. Despite the index remaining in a defined range, opportunities for selective equity purchases are emerging across various sectors. Participants are advised to align investment strategies accordingly. Prudence in position sizing remains paramount given the mixed global cues and elevated geopolitical risks.
Religare Broking's Top Picks
Ajit Mishra, senior vice president of research at Religare Broking, has outlined three specific stock recommendations. Axis Bank Limited, the private banking stalwart, is showing steady upward momentum and recently broke out of a declining trendline, signaling an end to its corrective phase after a head-and-shoulders pattern breakout. It is holding firm above the neckline and forming a higher base, establishing a fresh buying pivot, with strong price-volume action and a decisive move above resistance suggesting further appreciation; Religare recommends buying Axis Bank with a target of ₹1385 and a stop-loss at ₹1250.
HCL Technologies Limited, the IT major, continues to exhibit a strong bullish structure characterized by higher highs and higher lows, indicating sustained uptrend continuation. The stock has demonstrated a robust rebound from its medium-term moving averages, with improving trading volumes validating demand at lower levels. Its technical configuration remains supportive of further gains, with corrective declines expected to attract renewed buying interest; Religare suggests buying HCL Technologies with a target of ₹1795 and a stop-loss at ₹1600.
Tata Steel Limited, a notable performer in the metals sector, has witnessed a fresh breakout marking a new all-time high. The stock successfully navigated a trend-continuation pattern formed during its corrective-to-recovery phase over the past eighteen months. This breakout signals the commencement of a significant new upward leg, supported by a favorable sectoral backdrop and a constructive chart setup; Religare recommends buying Tata Steel with a target of ₹203 and a stop-loss at ₹182.
(Disclaimer: Ajit Mishra is senior vice president of research at Religare Broking. Views expressed are his own.)