However, the broader market saw a pause in its recent rally, with both Nifty Midcap and Smallcap indices closing in the red. Market sentiment was buoyed by positive domestic developments, including the government’s proposal for GST rate rationalization.
However, global cues remained cautious ahead of the highly anticipated Jackson Hole symposium, with the US markets experiencing a sell-off in technology stocks.
Two stock recommendations by MarketSmith India for 22 August
Buy: Apollo Micro Systems Ltd. (Current price: ₹204)
- Why Apollo Micro is recommended: Strong presence in defense and aerospace, government policy tailwinds, rising order book, strong industry megatrend, niche technology capabilities, and potential for margin expansion
- Key metrics: P/E: 103.10 | 52-week high: ₹221.38 | Volume: ₹183.18 crore
- Technical analysis: Trending above all its key moving averages with a positive bias
- Risk factors: Sector and market sensitivity, moderate risk assessment, small-cap and liquidity risks
- Buy: ₹204
- Target price: ₹192 in 2-3 months
- Stop loss: ₹192
Buy: Radico Khaitan Ltd (Current price: ₹2,895)
- Why Radico Khaitan is recommended: Premiumization trend and portfolio strength, strong brand equity, and distribution depth
- Key metrics: P/E: 93.93 | 52-week high: ₹2,940 | Volume: ₹63.36 crore
- Technical analysis: Horizontal trendline breakout
- Risk factors: Stringent regulation and state-level excise policies, high US tariffs on exports
- Buy at: ₹2,870-2,900
- Target price: ₹3,150 in 2-3 months
- Stop loss: ₹2,780
Nifty 50: How the benchmark index performed on 21 August
Indian equities extended their upward momentum for a sixth straight session, with the Nifty 50 closing 94 points higher at 25,083 points and the Sensex rising 142 points to settle at 82,086. The index opened firmly and traded largely range-bound through the morning, briefly dipping to an intraday low of 24,960 before finding strong support and rebounding in the afternoon to test a high near 25,120.
Sustained buying in financials, auto, and energy stocks supported the recovery, while IT stocks remained under pressure ahead of the US Federal Reserve’s Jackson Hole symposium. On the sectoral front, pharmaceuticals emerged as the top performer, with Cipla and Dr. Reddy’s Laboratories leading the gains, while FMCG and auto stocks faced selling pressure.
The market breadth was marginally in favour of advances on the NSE.
On the technical front, the Nifty 50 decisively surpassed both its 50-DMA and the psychologically important 25,000 level, reinforcing a short-term bullish bias. The relative strength index (RSI) has been rising steadily over the past three sessions and now stands near 58, indicating strengthening momentum.
Meanwhile, the MACD has turned marginally positive, signaling an easing of downside pressure. However, it continues below both its signal line and the zero axis, indicating that while sentiment has improved, a clear confirmation of a sustained trend reversal is yet to emerge.
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 four.
The index continued to trade above its 50-DMA, supported by strengthening momentum on both the daily and weekly charts. This constructive setup reinforces the near-term outlook, with the next key resistance zone identified at 25,250-25,350, provided the index sustains above 24,850.
On the downside, a breach below 24,850 could trigger volatility and push the index into a critical support band of 24,650-24,850. Price action around these levels will remain crucial in determining the index’s directional bias in the upcoming sessions.
How did Nifty Bank perform?
On Thursday, Bank Nifty opened on a strong note. However, it soon turned volatile, though it successfully defended the previous day’s low.
The index formed a bullish candle on the daily chart with a higher-high and higher-low price structure. However, it failed to close above its 21-DMA, indicating lingering resistance at higher levels.
Strength in key constituents such as ICICI Bank (+0.99%), HDFC Bank (+0.12%), Kotak Bank (+0.07%), and PNB (+0.02%) supported the index, helping it end the session in positive territory.
During the day, the index opened at 55,972.05, touched a high of 55,993.65, slipped to a low of 55,708.20, and eventually settled at 55,755.45.
The RSI has been moving sideways and is currently positioned at 48, reflecting mild weakness in momentum. Meanwhile, the MACD has turned positive after several weeks of a negative crossover, but its position below the central line continues to signal caution.
According to O’Neil’s methodology of market direction, Bank Nifty remains in an ‘Uptrend Under Pressure’. In this context, investors are advised to maintain selective exposure to high-quality stocks while emphasizing disciplined risk management to safeguard capital and focus only on high-conviction opportunities.
From a technical perspective, immediate resistance is seen near the 21-DMA, and a decisive move above this level could open the path toward the 50-DMA around 56,300, strengthening the bullish momentum.
On the downside, support is placed at the 100-DMA near 55,325, and a breach below this zone may trigger heightened volatility and extend the correction. Until then, the index is expected to trade within this defined range, with a selective bias toward large private sector banks.
MarketSmith India is a stock research platform and advisory service focused on the Indian stock market. Trade name: William O’Neil India Pvt. Ltd. (Sebi-registered Research Analyst Registration No.: INH000015543)
Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by Sebi and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors.
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.
