On Tuesday, Nifty50 declined 0.37%, closing near 24,853 amid broad-based profit-booking and rising geopolitical concerns. Sentiment was dampened by escalating tensions in West Asia following the US’s warnings over Tehran, which triggered a spike in crude oil prices. This led to selling pressure in key sectors such as Nifty Pharma, Auto, Metals, Oil and Gas, and Financials.
Two stock recommendations by MarketSmith India
Buy: Coromandel International Ltd (Current price: ₹2,307.7)
- Why Coromandel International is recommended: Consistent revenue growth, diverse, and expanding product portfolio
- Key metrics: P/E: 36.51 | 52-week high: ₹2,514.00 | Volume: ₹218.61 crore
- Technical analysis: Bounce back from its 50-DMA after a few days of consolidation
- Risk factors: Monsoon dependency and climatic variability, regulatory risks and subsidy delays, and raw material price volatility
- Buy at: ₹1,527
- Target price: ₹2,550 in three months
- Stop-loss: ₹2,220
Buy: Vinati Organics Ltd (Current price: ₹1,907)
- Why Vinati Organics is recommended: Strong growth in key segments, strategic capacity expansion, and strong growth in key segments
- Key metrics: P/E: 48.04 | 52-week high: ₹2,330 | Volume: ₹19.64 crore
- Technical analysis: Possible trendline breakout
- Risk factors: Client concentration, raw material price volatility, and antioxidant segment
- Buy at: ₹1,707
- Target price: ₹2,090 in three months
- Stop-loss: ₹1,775
Nifty 50: How the benchmark index performed on 17 June
The Nifty 50 opened on a firm note but quickly slipped into negative territory amid weak investor sentiment. The index remained range-bound within a narrow 170-point band and formed a small bearish candle on the daily chart, closing near the day’s low at 24,853, signaling a lack of sustained buying interest. Barring Nifty IT, all major sectoral and broader market indices ended in the red. Consequently, market breadth weakened notably, with the advance-decline ratio skewed sharply in favor of decliners at 1:3.
From a technical perspective, the Nifty 50 continues to trade above all its key moving averages, indicating underlying strength. However, the index has been consolidating within a defined range for the past five weeks, reflecting indecisiveness in market direction. As of Tuesday, the daily relative strength index (RSI) remains flat, hovering at 52-53, while the MACD continues to exhibit a negative crossover. This combination signals a waning of momentum and suggests a cautious sentiment may persist in the near term.
According to O’Neil’s methodology of market direction, the Nifty 50 reclaimed its recent high of 25,116. Hence, the market status has been upgraded to a Confirmed Uptrend.
The index encountered resistance near 25,000 and closed with a negative bias amid broader market weakness driven by geopolitical tensions. The index failed to sustain above this psychological level, indicating a lack of bullish conviction. For a reversal to gain traction, a decisive breakout above 25,000-25,200 is essential, potentially leading to a rally toward 25,700-25,800. However, continued failure to breach this range may result in sideways consolidation between 24,500 and 25,200, with strong support around 24,500-24,400.
How did Nifty Bank perform on Tuesday?
On Tuesday, the Bank Nifty faced resistance near 56,000 and extended its downward trajectory, closing approximately 0.41% lower. It formed an inside-range bearish candle on the daily chart, signaling indecision and persistent selling pressure. The broader financial space also remained under pressure, with the FINNIFTY index declining 0.39% and forming a bearish candle, reflecting continued weakness across the sector. Notably, all major constituents within the Banking and Financial segment ended in the red, underscoring broad-based sectoral weakness.
From a technical standpoint, the Bank Nifty index breached its 21-DMA and closed below it, indicating a deterioration in short-term trend strength. The relative strength index (RSI) continues to drift lower and is currently positioned around 52, reflecting weakening momentum. Additionally, the MACD remains in a negative crossover on the daily chart, reinforcing the prevailing bearish sentiment and suggesting the potential for further consolidation or downside pressure in the near term.
According to O’Neil’s methodology of market direction, Bank Nifty has recently transitioned from an ‘Uptrend Under Pressure’ to a bullish phase of a ‘Confirmed Uptrend’.
This index closed below its 21-DMA, signaling a shift toward a sideways trend with a negative bias from a short- to medium-term perspective. The immediate support is placed near 55,000, while resistance is aligned at 56,000, with a subsequent hurdle at 57,000. Recent price action indicates a likely continuation of range-bound trading between 55,000 and 57,000 in the near term. A decisive breakout beyond this range will be critical in determining the next directional trend.
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)
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.
