The Indian equity markets demonstrated notable strength during a week of consolidation, with the benchmark Nifty 50 index finding solid footing. After bouncing back from crucial support levels between 25,700 and 25,800, the index consistently challenged a key falling trendline resistance situated near the 26,000 mark. On December 19, the Nifty traded robustly in the 25,950–26,000 range, registering intraday gains of approximately 0.5–0.6%, as broader market sentiment turned positive.
Market Resilience and Technical Outlook
Mid-cap and small-cap indices led the charge, outperforming their larger peers. This signalled a reversal in strength and a resurgence of buying interest after recent declines, which in turn helped stabilise the overall market breadth. The week's trading was marked by volatility, yet the price action was constructive, with selling pressure being effectively absorbed at lower levels. The primary uptrend remained undisturbed, and the Nifty concluded the week around 25,950, showing little net change and indicating an ongoing consolidation phase at elevated levels.
Sharing his technical perspective on the Nifty 50, Mehul Kothari, Deputy Vice President of Technical Research at Anand Rathi, stated that the index maintains a cautiously bullish bias within its current consolidation. "The index has shown resilience by rebounding from the 25,700–25,800 support zone, which coincides with a rising trendline," Kothari noted. He highlighted that a decisive breakout above the crucial falling trendline resistance at 26,020–26,080, backed by strong volume, would be a significant trigger.
Such a breakout, Kothari explained, would confirm an emerging inverse head-and-shoulders pattern on hourly and daily charts alongside a channel breakout. This development could potentially unlock upside targets extending from 26,300 to 26,600. He emphasised that the broader market structure is supportive, with mid and small-cap indices showing reversal patterns. As long as the 25,600–25,700 zone holds on a weekly closing basis, the primary uptrend is considered intact.
Bank Nifty's Range-Bound Struggle
On the Bank Nifty front, Kothari pointed out that the index attempted a recovery but continued to face stiff supply near the falling trendline resistance around 59,800–60,000. Repeated rejections at this level indicate weak follow-through buying. The index has slipped back into a consolidation zone near 58,800–59,000. While downside risk is limited if the 58,500–58,000 support holds, a sustained upside move remains constrained without a decisive breakout above 60,000–60,500. Overall, the Bank Nifty is trading in a range and underperforming relative to the Nifty, awaiting clearer directional cues.
Expert's Stock Recommendations for Monday
For investors looking for opportunities, Mehul Kothari of Anand Rathi recommended three stocks to consider buying on Monday, all priced under ₹200.
UCO Bank: Kothari suggests buying at ₹28.50, with a target price of ₹31 and a stop loss set at ₹27.50.
Ircon International: The recommendation is to buy at ₹153, aiming for a target of ₹165, while maintaining a stop loss at ₹145.
MRPL (Mangalore Refinery and Petrochemicals Limited): Investors can consider buying at ₹148, with a target of ₹164 and a stop loss at ₹138.
Disclaimer: This information is for educational purposes only. The views and recommendations are those of the individual analyst and not of Mint. Investors are strongly advised to consult with certified experts before making any investment decisions.
