The Nifty index failed to hold the 24,500 level, signalling potential profit booking. As the broader market shows caution, analysts have identified Divi's Laboratories, MCX, and Eternal as stocks with potential technical strength. Investors should watch support levels closely as market volatility persists.
The Indian stock market witnessed a day of caution on August 12, 2026, as the Nifty 50 index failed to sustain above the key 24,500 level. Selling pressure emerged early in the session, leading to a bearish trend as investors locked in profits after recent gains. For the index to regain momentum, market participants are looking for a firm close above the 24,500 mark. If it fails to hold this level, support levels near 24,350 and 24,250 may come into focus.
The Bank Nifty also faced headwinds, trading below its 20-day exponential moving average. This suggests that the banking sector, a major component of the overall market, is currently lacking the strength to drive a quick recovery. When both major indices show weakness, it often leads to a defensive approach from traders, increasing market volatility.
Despite the broader market consolidation, analysts at Motilal Oswal Financial Services have highlighted three stocks showing positive technical setups: Divi's Laboratories, MCX, and Eternal.
Divi's Laboratories has attracted attention due to its consistent uptrend, characterized by higher highs and higher lows. Technical indicators suggest a potential breakout pattern, often referred to as a pole and pennant formation, which may indicate continued interest in the pharma stock. Investors typically monitor such breakouts for signs of momentum, though past performance does not guarantee future results.
MCX is also being watched after breaking a falling supply trend line. This move was supported by a noticeable increase in trading volumes, which technical analysts often view as a sign of underlying buyer interest. The stock has moved above its short-term moving averages, suggesting a shift in sentiment after a period of downward pressure.
Eternal, which has shown strong financial performance with significant net profit growth in the recent June 2026 quarter, is also on the radar. While the technical setup appears bullish with signs of buying interest near the 10-day moving average, investors should keep the valuation in mind. As a growth-focused company, its stock price is often influenced by its high valuation premiums compared to traditional companies.
For investors, the primary monitorable is the Nifty's ability to reclaim the 24,500 level. In a volatile market, relying solely on technical signals can be risky. It is important for shareholders to be aware of their specific stop-loss levels and the broader sector trends, as market corrections can affect even stocks with positive technical setups. The next few sessions will be crucial in determining whether this is a temporary dip or the start of a deeper correction.