The Indian equity markets navigated a consolidation phase during the holiday-shortened week, marked by thin trading volumes and muted participation. This was largely attributed to year-end positioning and the Christmas holiday. The benchmark Nifty 50 index traded in a tight range between 26,000 and 26,200, facing headwinds from IT and financial stocks. In contrast, broader markets displayed resilience with selective buying interest observed in sectors like metals, defence, and railways.
Market Outlook: Consolidation Before a Breakout?
According to Mehul Kothari, Deputy Vice President of Technical Research at Anand Rathi, the primary uptrend for the market remains intact. The Nifty 50 concluded the week near 26,045, reflecting cautious optimism as investors await the upcoming corporate earnings season. Kothari noted that while the index opened with a gap-up on Monday, it failed to decisively break above the 26,300 resistance level.
He highlighted that with the gap now largely filled, a slide below 26,000 could see the Nifty drift towards a crucial support level at 25,700. "A fresh rally is expected only on a decisive breakout above 26,300," Kothari stated. He added that a key positive is the strong bounce-back in broader markets, which are likely to continue their relative outperformance. He advises traders to focus on stock-specific opportunities in quality broader market names while keeping index positions light until a clear directional breakout emerges.
Bank Nifty Remains Directionless
Shifting focus to the banking index, Kothari pointed out that the Bank Nifty continued its directionless movement, oscillating within a narrow band of 58,900 to 59,500. The index faces resistance near a falling trendline around 59,800–60,000. Repeated failures to hold above 59,500 indicate a lack of follow-through buying momentum.
On the lower side, the zone of 58,900–58,500 acts as immediate support. A breakdown below this range could trigger a move towards 58,000. Overall, the Bank Nifty continues to underperform the Nifty and remains range-bound. A decisive trend is anticipated only on a breakout above 60,000–60,500 or a breakdown below 58,500.
Expert Stock Picks Under ₹200
For investors looking for specific opportunities, Mehul Kothari of Anand Rathi recommended three stocks to buy on Monday, all trading under ₹200. Here are the details of his recommendations:
1. Lemon Tree Hotels: Buy at ₹161.50, with a target price of ₹170.50 and a stop loss set at ₹157.
2. NBCC (India): Buy in the range of ₹119 to ₹122. The target is set between ₹130 and ₹134, with a stop loss at ₹115.
3. SAIL (Steel Authority of India Ltd): Buy in the range of ₹130 to ₹132. The target price is ₹145, and the stop loss is placed at ₹124.
Disclaimer: This article 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 certified experts before making any investment decisions.
