MarketSmith India Unveils Two Stock Picks for January 19 Trading
MarketSmith India has released its latest stock recommendations for January 19. The research platform suggests two buy opportunities for investors looking to navigate today's market conditions.
Friday's Market Recap: IT Sector Leads Recovery
Indian equity benchmarks ended Friday's session in positive territory. This break came after two consecutive days of losses. The Nifty 50 index gained 28.75 points to close at 25,694.35. The Sensex climbed 187.64 points, settling at 83,570.35.
A strong rally in the information technology sector powered the market's upward move. Infosys shares surged 5.6% following the company's robust third-quarter results. The IT giant also provided optimistic revenue guidance, boosting investor sentiment.
However, profit booking in heavyweight stocks like Cipla and Jio Financial Services trimmed some early gains. Market breadth remained cautious throughout the session. On the Nifty 50 index, 22 stocks advanced while 28 declined.
The Nifty IT index emerged as the top sectoral performer, jumping over 3.3%. In contrast, pharmaceutical and consumer durable stocks faced selling pressure. Broader market sentiment received support from news about a potential India-US trade deal.
Foreign institutional investor outflows and elevated crude oil prices limited further upside. The advance-decline ratio across all stocks showed 1,339 advances against 1,828 declines, indicating selective participation.
First Recommendation: DCB Bank Limited
MarketSmith India recommends buying DCB Bank shares at current levels. The stock is trading around ₹187.5 per share.
Investment Rationale:
- Strong focus on retail and MSME lending segments
- Healthy improvement trend in asset quality
- Comfortable capital adequacy position
- Stable net interest margins supported by granular deposits
- Experienced management team with consistent profitability
- Improving current account savings account ratio
- Prudent risk management approach
Key Metrics:
- Price-to-earnings ratio: 8.96
- 52-week high: ₹190.50
- Volume: ₹54.64 crore
Technical Analysis: The stock shows a cup with handle breakout pattern.
Risk Factors:
- Smaller scale compared to large private banks
- High competition in retail and MSME lending space
- Sensitivity to economic slowdowns
- Asset quality pressure during stressed cycles
- Dependence on wholesale funding
- Margin pressure in falling interest rate cycles
- Regulatory and compliance risks
Trading Parameters:
- Buy range: ₹186–189
- Target price: ₹215 (two to three months)
- Stop loss: ₹176
Second Recommendation: MTAR Technologies Limited
The second recommendation is MTAR Technologies, currently trading around ₹2,660 per share.
Investment Rationale:
- Niche precision engineering capabilities
- Strong presence in space, defence, and clean energy sectors
- Long-term contracts with marquee clients including ISRO and DRDO
- High entry barriers and strong technical moat
- Healthy order book visibility
- Focus on high-margin complex components
- Export-oriented business mix
Key Metrics:
- Price-to-earnings ratio: 181.32
- 52-week high: ₹2,809
- Volume: ₹315.39 crore
Technical Analysis: The stock exhibits a cup base breakout pattern.
Risk Factors:
- Dependence on government and public sector unit orders
- Project execution delay risks
- Customer concentration exposure
- Cyclical nature of capital expenditure-driven sectors
- Margin pressure from raw material costs
- High working capital requirements
- Limited pricing flexibility
Trading Parameters:
- Buy range: ₹2,650–2,680
- Target price: ₹3,150 (two to three months)
- Stop loss: ₹2,560
Nifty 50 Technical Analysis
The Nifty 50 index closed Friday's session with marginal gains after volatile intraday movements. The index opened strong and reached an intraday high of 25,873 points. However, profit booking at higher levels pulled prices down from the peak.
From a technical perspective, the index has been trading between its 50-day and 100-day moving averages for five consecutive sessions. This indicates a consolidation phase rather than a trend reversal.
Momentum indicators show mild fatigue. The relative strength index has slipped below its recent average but remains in neutral territory. The moving average convergence divergence indicator stays below its signal line with a negative histogram.
According to O'Neil's market direction methodology, Nifty's breach of the 50-day moving average and 25,700 level has shifted the market status to "uptrend under pressure." A decisive breakout above 26,373 is needed to restore a confirmed uptrend.
Immediate support lies at 25,500, with stronger demand around 25,300. The broader uptrend lacks momentum, requiring a sustained move above 26,000 for confirmation.
Nifty Bank Performance
The banking index demonstrated relative strength on Friday. Nifty Bank opened at 59,590 and dipped to 59,510 before rebounding steadily. The index reached an intraday high of 60,235 and closed near session highs at 60,095.
This price action highlights strong dip-buying interest and institutional support at lower levels. The index has closed positively for four consecutive sessions, signalling renewed strength.
Momentum indicators remain supportive. The relative strength index sits around 61, indicating positive momentum without entering overbought territory. The moving average convergence divergence stays in positive territory with the signal line above zero.
According to O'Neil's methodology, Nifty Bank remains in a confirmed uptrend. Immediate resistance lies near 60,437, with potential to test 60,500–61,000 in coming days. Support exists between 59,400–59,200.
About MarketSmith India
MarketSmith India operates as a stock research platform and advisory service focused on the Indian equity market. The platform provides tools and resources to help investors make informed decisions. Its methodology follows the CAN SLIM approach developed by legendary investor William J. O'Neil.
The service offers a 10-day free trial through registration on its website. The company trades under the name William O'Neil India Private Limited and holds SEBI registration number INH000015543.
Disclaimer: The views and recommendations presented in this article belong to individual analysts. These do not represent the views of Mint. Investors should consult certified experts before making any investment decisions.
