Two stock recommendations by MarketSmith India:
Hindustan Unilever Ltd (current price: ₹2,521.20)
Why it’s recommended: Rural demand recovery and volume-led sales, preimmunized brand portfolio, strategic investment, and corporate restructuring.
Key metrics: P/E: 55.69 | 52-week high: ₹ 3,035 | Volume: ₹1,382 crore
Technical analysis: Trending above all its key moving averages, momentum improvement.
Risk factors: Elevated input cost and its pressure on margin, sluggish urban consumption, and execution risk around demerger.
Buy: ₹2,450-2,500
Target price: ₹3,000 in two to three months
Stop loss: ₹2,350
Godrej Consumer Products Ltd (current price: ₹1,259)
Why it’s recommended: Strong revenue and volume momentum, double-digit growth in Africa and the Middle East, and margin recovery.
Key metrics: P/E: 65.30 | 52-week high: ₹1,541 | Volume: ₹200 crore
Technical analysis: Rebound from 100-week moving average
Risk factors: Volatile commodity prices, soft urban demand.
Buy at: ₹1,220-1,250
Target price: ₹1,515 in two to three months
Stop loss: ₹1,170
How Nifty 50 performed on 31 July
On Thursday, the Nifty 50 opened with a gap-down and witnessed a highly volatile session on account of the weekly derivatives expiry. Although the index recovered from intraday lows and briefly turned positive, it failed to sustain higher levels and slipped back into negative territory during the final hour of trade. Barring Nifty FMCG, all major sectoral indices and broader market indices ended in the red. Market breadth weakened notably, with the advance-decline ratio settling at 1:2, indicating broad-based weakness.
From a technical perspective, the Nifty 50 remains below its 50-DMA, underscoring a sustained negative bias in the trend. The relative strength index (RSI) is sloping downward and currently hovers around 40, indicating weakening momentum. Additionally, the MACD continues to trade below its signal line and the central line, maintaining a negative crossover. This confluence of indicators suggests a cautious near-term outlook, with limited signs of immediate reversal unless key resistance levels are reclaimed.
According to O’Neil’s methodology of market direction, the market status has been downgraded to an “Uptrend Under Pressure” as the Nifty breached its 50-DMA and the distribution day count rose to five.
The index witnessed another session of volatility on Thursday, facing stiff resistance near 25,000 and ultimately ending with a negative bias. The index struggled to sustain intraday gains, reflecting broader market weakness and cautious investor sentiment. Looking ahead, 24,600-24,480 remains a critical support area that may help contain further downside. On the upside, a decisive breakout above 25,000, followed by 25,300, will be essential to revive bullish momentum in the near term.
How Nifty Bank performed yesterday
On Thursday, Bank Nifty opened with a gap-down and witnessed high intraday volatility, oscillating within a broad range of 55,547-56,406 before settling with a loss of 0.34%. Both private and PSU Banking segments experienced choppy trading. However, the PSU Banking index underperformed and contributed more significantly to the downside. Similarly, the FINNIFTY index ended 0.20% lower, reflecting broader weakness in the financial space amid subdued investor sentiment.
Technically, the index remains below its 50-DMA, reinforcing a weak short-term structure. The relative strength index (RSI) continues to trend with a negative bias and is currently positioned around 42, reflecting subdued momentum. Additionally, the MACD sustains its negative crossover and continues to trade below the signal line, indicating that any potential upside may remain limited. Overall, the technical setup points to a cautious outlook, with the index lacking strong directional conviction in the near term.
Despite this, according to O’Neil’s methodology of market direction, Bank Nifty remains in a ‘Confirmed Uptrend,’ a status it has maintained consistently over the past several weeks.
On Thursday, Bank Nifty declined to 55,500. However, it managed a partial intraday recovery before closing on a negative note. Moving ahead, 55,500 remains a crucial support level, and a decisive breach below it could trigger further downside pressure. On the upside, immediate resistance is seen around 56,500. A breakout above or breakdown below this defined range is likely to set the next directional move for the index, making these levels critical to watch in the coming sessions.
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, developed by legendary investor William J. O’Neil. You can access a 10-day free trial by registering on its website.
Trade name: William O’Neil India Pvt. Ltd.
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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.
