Two stock recommendations by MarketSmith India for 4 September
Buy: Abbott India Ltd.(current price: ₹32,500)
- Why it’s recommended: Strong cash flow and financial health, business leadership and execution
- Key metrics: P/E: 48, 52-week high: ₹37,000, volume: ₹1.8 crore
- Technical analysis: Reclaimed its 100-DMA
- Risk factors: Corporate control by MNC parent, product & segment concentration, regulatory & compliance exposure
- Buy: ₹32,500
- Target price: ₹35,500 in two to three months
- Stop loss: ₹31,000
Buy:Rashtriya Chemicals and Fertilizers Limited (current price: ₹161.40)
- Why it’s recommended: Strategic position and product diversification, capacity utilization and distribution network
- Key metrics: P/E: 30.71; 52-week high: ₹245; volume: ₹79.64 crore
- Technical analysis: Downward-sloping trendline breakout
- Risk factors: Raw material price volatility, aging infrastructure and cost pressures
- Buy at: ₹160.50–161.50
- Target price: ₹173 in two to three months
- Stop loss: ₹156
How the Nifty 50 performed on 3 September
On Wednesday, Indian equities extended gains for a second straight session, with Nifty 50 rising 135 points (0.55%) to close at 24,715, supported by strong buying in banking, metals, and auto stocks. The index traded within a narrow range of 24,533–24,737 but maintained a steady upward bias through the day. The Sensex gained 410 points.
Investor sentiment was buoyed by expectations of pro-consumption measures from the upcoming GST Council meeting, especially for the auto and FMCG sectors. However, IT stocks remained under pressure amid global growth concerns and weak cues from US tech peers.
Market breadth was notably positive, with the advance-decline ratio on the NSE indicating a broad-based rally as approximately 1,935 stocks advanced against 998 that declined. On the sectoral front, Nifty Metal and Pharma indices led the gains, buoyed by strong domestic sentiment.
From a technical standpoint, the index closed the session on a positive note but remained marginally below its 100-DMA, reinforcing 24,750 as a key resistance level in the near term. The relative strength index (RSI) continues to recover, currently hovering in 48–49, indicating improving momentum but still below the bullish threshold. Meanwhile, the MACD remains subdued, trading flat and below the central line, suggesting a lack of strong directional conviction.
According to O’Neil’s methodology of market direction, the market status has been downgraded to an “uptrend under pressure” as Nifty breached its 50-DMA and the distribution day count is at three.
A decisive move above this threshold is necessary to unlock further upside potential toward 25,000. On the downside, immediate support is placed around 24,350-24,300, and a breach below this band could accelerate declines toward the 200-DMA at 24,070. The overall structure suggests that the index remains range-bound, with critical levels on both sides likely to dictate the near-term trend.
How did Nifty Bank perform?
Nifty Bank opened on a subdued note but gradually saw buying interest, eventually close in the green. It formed a bullish candle on the daily chart, advancing about 0.76% on an intraday basis. It opened at 53,630.75, touched an intraday high of 54,136.15 and a low of 53,561.75, and closed at 54,067.55.
The increase was largely supported by gains in IndusInd Bank (+2.21%), Canara Bank (+2.02%), and Punjab National Bank (+1.57%), the top three contributors.
The relative strength index (RSI) has edged up marginally and is currently positioned at 37, while the MACD continues to trade with a negative crossover below the central line, underscoring persistent bearish momentum. According to O’Neil’s methodology of market direction, Bank Nifty remains classified as an “uptrend under pressure.”
In such conditions, investors should maintain a cautious stance—focusing on fundamentally robust and technically resilient stocks, enforcing disciplined risk management, and deploying capital selectively into only high-conviction opportunities. This approach will help navigate volatility while preserving portfolio strength.
The index continues to face stiff resistance around 54,000-54,400, with a sustained move above this band required to confirm a meaningful recovery. A breakout beyond 55,000 would further strengthen bullish momentum and open the door for an extended upward move.
On the downside, the index is hovering close to its crucial support at 53,500-53,600, and a breach below this zone could trigger a correction of nearly 2%, potentially leading to a retest of the 200-DMA.
MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. It offers tools and resources to help investors make informed decisions based on the CAN SLIM methodology, founded by legendary investor William J. O’Neil. You can access a 10-day free trial by registering on its website.
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Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
