India’s macroeconomic backdrop remains robust, driven by easing inflation, lower interest rates, a healthy monsoon, and softer crude prices. Eight straight months of easing inflation have fuelled investor confidence and ignited a relief rally.
Investor caution persists, however, as the market awaits Q1FY26 corporate earnings. An upgrade in earnings estimates is key to validating current premium valuations. On the global front, mixed sentiment stems from fading hopes of a near-term U.S. Fed rate cut due to sticky inflation and fresh tariff concerns, notably a proposed 50 percent duty on copper.
Though the Jane Street episode is now behind us, it has left a residue of uncertainty that could prove an impediment to the market’s progress.
Three stocks to buy today, recommended by Raja Venkatraman of NeoTrader
SWANENERGY: Buy above ₹522 and on dips to ₹485, stop ₹475, target ₹574-595
SOBHA: Buy above ₹1,651 and on dips to ₹1,620, stop ₹,1599, target ₹1,775-1,800
EMUDHRA: Buy above ₹822 and on dips to ₹795, stop ₹785, target ₹865-885
How the stock market performed on Wednesday
Market indices traded in a narrow corridor on 16 July. The Sensex closed at 82,634.48, up 0.08%, and the Nifty at 25,212.05, up 0.06 %. Market breadth favored advancers, with 2,234 gainers against 1,658 losers.
Outlook for trading
The Nifty is rebounding again is now testing supports around 25,000. The ongoing rise will face challenges at immediate value area resistances on the daily chart around 25,300 then 25,500. While 25,300 is acting as a stiff resistance, a move above this would force the bears to rethink. The pullback is being currently being bought into as investors are expecting a revival.
While there has been some buying, we could be entering a critical phase as the week is coming to a close. We can now revise the next set of supports to around 22,300, where buying the dip could emerge. The Put Call Ratio (PCR) has moved to 0.87 and is just below 1 in Nifty and 0.87 in Bank Nifty, highligting a sedate approach by the bulls.
A look at Bank Nifty shows constant support from the ascending trendline, highlighting the possibility of a rebound. An encouraging trigger could carry prices higher.
At the moment the bears have not been able to drag the index much lower. Until we see Nifty move below 25,000 decisively, Open Interest data suggests immediate supports is at 25,200.
Three stocks to trade today, recommended by NeoTrader’s Raja Venkatraman
SWANENERGY (current price ₹521.95)
Buy above ₹522 and dips to ₹485, stop ₹475, target ₹574-595
- Why it’s recommended: After spending lot of time in consolidation the prices corrected sharply and broke the recent supports to test the cloud support suggesting that the trends could now revive. As the prices have now neared the cloud support region around 68, we can look to trade the rebound. Consider going long.
- Key metrics:
- P/E: 1797.16
- 52-week high: ₹809.80
- Volume: 31.22M
- Technical analysis: Support at ₹450, resistance at ₹650
- Risk factors: Market volatility and sector-wide fluctuations in geopolitical news could impact returns.
- Buy at: above ₹522 and dips to ₹485
- Target price: ₹574-595 in one month
- Stop loss: ₹475
SOBHA (current price ₹1,650.60)
Buy above ₹1,651 and dips to ₹1,620, stop ₹1,599 target ₹1,775-1,800
- Why it’s recommended: SOBHA is experiencing a tailwind due to its strong performance last quarter. Profit booking in June dragged the stock down to the cloud support. The subsequent recovery over the past two days has now formed a rounding pattern at higher levels. This can be seen as an opportunity to initiate a long.
- Key metrics:
- P/E: 157.11
- 52-week high: ₹2,066.20
- Volume: 490.46K
- Technical analysis: Support at ₹1,497, resistance at ₹1,800
- Risk factors: Rising input costs, increased operational expenses, and potentially foreign exchange impacts.
- Buy at: above ₹1,651 and dips to ₹1,620.
- Target price: ₹1,775-1,800 in one month.
- Stop loss: ₹1599
EMUDHRA (current price ₹819.15)
EMUDHRA: Buy above ₹822 and dips to ₹795, stop ₹785, target ₹865-885
- Why it’s recommended: The stock has been forming a rounding pattern for the past few days and a with strong volume-led breakout in the last few sessions has managed to cross the KS line, resulting in a strong breakout. The formation of a long body candle with positive news on acquisition augurs well for the stock. Momentum is also seen heading higher.
- Key metrics:
- P/E: 361.62
- 52-week high: ₹1,023.55
- Volume: 490.46K
- Technical analysis: Support at ₹750, resistance at ₹1,000
- Risk factors: Global economic challenges, and challenging macroeconomic environment.
- Buy at: above ₹822 and dips to 795
- Target price: ₹865-885 in one month
- Stop loss: ₹785
Raja Venkatraman is the co-founder of NeoTrader. His Sebi-registered research analyst registration no. is INH000016223.
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.
