Mixed global cues and cautious sentiment ahead of key US economic data also weighed on investor confidence. Despite early gains, the index lost momentum in the second half as selling pressure intensified.
However, easing volatility (India VIX) near 12.39 suggested limited panic, with selective buying in auto, pharma, and IT stocks offering some intraday support.
Two stocks recommended by MarketSmith India for 4 July:
Oil India (current price: ₹452.95)
Why it’s recommended: Higher oil and gas production, strong capital spending and upstream expansion, and improved realization.
Key metrics: P/E: 11.27 | 52-week high: ₹ 768 | Volume: ₹392 crore.
Technical analysis: 200-DMA retake along with strong volume action.
Risk factors: Volatility in global oil prices, margin compression, capex and debt risk, project execution delays.
Buy at: ₹452
Target price: ₹520 in two to three months
Stop loss: ₹418
Triveni Turbine (current price: ₹637.05)
Why it’s recommended: Strong revenue and margin growth, record order book, diversification, and huge investment in R&D.
Key metrics: P/E: 56.69 | 52-week high: ₹ 885 | Volume: ₹108 crore
Technical analysis: Trend reversal, 100-DMA retake.
Risk factors: Cyclicity in market demand, execution risk, and competitive pricing pressure.
Buy at: ₹637
Target price: ₹740 in two to three months
Stop loss: ₹578
How Nifty 50 performed on 3 July
On Thursday, the Nifty 50 opened on a positive note but remained volatile throughout the first half of the session. In the latter half, intensified profit booking dragged the index into negative territory. The daily price action resulted in the formation of a bearish candle with a long upper wick, indicating selling pressure near the day’s high. However, the index managed to protect the previous day’s low and closed marginally above 25,400. Barring Nifty Auto, Pharma, and FMCG, all major sectoral and broader market indices ended in the red, resulting in a flat market breadth with an advance-decline ratio of 1:1.
Technically, the Nifty 50 maintains a strong bullish structure, holding above all its key moving averages across multiple timeframes, which reinforces the broader uptrend. However, the recent price consolidation reflects a temporary loss of momentum in the short term. The relative strength index (RSI) has started to decline and is currently positioned around 59-60 on the daily chart, signalling emerging profit-booking pressure. On the other hand, the daily MACD continues to stay in positive territory, suggesting that the underlying trend remains in favour of the bulls.
According to O’Neil’s methodology of market direction, the Nifty has reclaimed its recent high of 25,116. Hence, the market status has been upgraded to a Confirmed Uptrend as of 11 June 2024.
The Nifty 50 extended its profit-booking phase and closed near 25,400 with a mild negative bias, reflecting cautious investor sentiment. Despite recent corrections, the broader market undertone remains positive, and the potential for resumption of the uptrend in the coming sessions is intact. In the near term, the index may witness choppy or range-bound movement. Key support levels are seen at 25,200 and 25,000, while resistance on the upside is expected around 25,700.
How Nifty Bank performed yesterday
The Nifty Bank extended its decline for a second consecutive session, slipping 0.36% on Thursday amid a choppy and range-bound trading environment. The day’s price action led to the formation of a bearish candle, characterized by a ‘lower-high lower-low’ structure on the daily chart, reflecting short-term weakness. The decline was primarily driven by profit booking in heavyweights such as Kotak Mahindra Bank and State Bank of India (SBI). In tandem, the Nifty Financial Services Index (FINNIFTY) also underperformed, closing with a loss of 0.47%, indicating a broader weakness across the financial space.
Technically, the Nifty Bank continues to trade above all its key moving averages and remains approximately 0.58% above its 21-DMA, indicating that the broader trend remains intact. However, on the momentum front, the relative strength index (RSI) has weakened, showing a downward slope and currently hovers near 56, signalling emerging short-term pressure. Despite this, the MACD maintains a positive crossover, suggesting persistent underlying strength and an intact longer-term bullish structure.
As per O’Neil’s methodology of market direction, the Nifty Bank remains in a ‘Confirmed Uptrend’, a trend it has sustained over the past few weeks.
The index tested 57,000 but failed to sustain above it, closing below this level with a negative bias. The immediate and strong support is now placed near 56,000, which is expected to act as a cushion against short-term pullbacks. As long as the index trades below 57,000, it is likely to remain range-bound within 56,000-57,000. For the index to regain upward momentum, a decisive break and sustained close above 57,000 is essential; failure to do so may lead to continued volatility in the near term.
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.
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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.
