Sectoral performance was markedly divergent. Nifty IT and Realty indices faced significant selling pressure, led by a 2.3% drop in TCS. Nifty Metal and PSU Bank sectors provided a crucial cushion. Tata Steel emerged as the top gainer, surging 3.7%, supported by rising base metal prices. The overall market breadth was slightly negative, with an advance-decline ratio of approximately 0.95:1, reflecting a cautious undercurrent despite mid-cap resilience.
Two stock recommendations for 16 January by MarketSmith India
Buy: BSE Limited (current price: ₹2,836)
- Why it’s recommended: Monopoly in equity index derivatives (Sensex), growing retail & algo trading volumes, strong cash-rich, debt-free balance sheet, rising exchange and data revenue, strong brand and regulatory moat, expanding product segments (commodities, SME, mutual funds), high operating margins, and attractive dividend payout history.
- Key metrics: P/E: 67.04, 52-week high: ₹2,960, volume: ₹1,090.10 crore
- Technical analysis: Trendline breakout
- Risk factors: High dependence on trading volumes, regulatory fee or policy changes, intense competition from NSE, technology or cyber-security risks, volatility in capital markets, pressure on transaction yields, slower growth in new listings, and market downturn impact.
- Buy: ₹2,830–2,850
- Target price: ₹3,200 in two to three months
- Stop loss: ₹2,690
Buy: Craftsman Automation Limited (current price: ₹7,850.50)
- Why it’s recommended: Strong auto-component franchise, diversified OEM customer base, leadership in powertrain & casting, growing EV & non-auto exposure, healthy order book visibility, high operating margins, robust cash flows, capacity expansion underway, technology & design capabilities, and export growth potential.
- Key metrics: P/E: 70.31, 52-week high: ₹8,069, volume: ₹68.43 crore
- Technical analysis: Flat base breakout restest
- Risk factors: Cyclical auto demand, dependence on key OEMs, raw material price volatility, margin pressure risk, high capex execution risk, EV transition disruption, global slowdown impact, currency fluctuation risk, competitive intensity, and customer concentration risk.
- Buy at: ₹7,830–7,880
- Target price: ₹8,700 in two to three months
- Stop loss: ₹7,450
How the Nifty 50 performed on 14 January
Indian equities ended marginally lower on Wednesday, with the benchmark indices consolidating amid mixed sectoral cues. Nifty 50 closed at 25,665.6, down 66.7 points or 0.26%, after oscillating in a narrow intraday range of 25,604–25,792, while failing to sustain above its previous close of 25,732. Market breadth was evenly poised, with 1,572 stocks advancing against 1,567 declines, indicating a balanced undertone despite the headline weakness.
On the sectoral front, Nifty IT, FMCG, Auto, and Consumer Durables dragged the market, reflecting valuation concerns and selective profit-taking. On the other hand, Metals (+2.7%) and PSU Banks (+2.1%) outperformed on expectations of stable global demand and improved balance-sheet visibility. Oil & Gas and non-bank financials also provided modest support, partially offsetting weakness in private banks and realty.
Momentum indicators present a mixed but instructive picture. The RSI has cooled off from higher levels and is currently positioned in the neutral zone, drifting lower but still holding above its prior swing lows. This moderation in RSI signals easing bullish momentum and supports the view of a sideways-to-consolidative phase, while the absence of oversold conditions suggests that the downside remains contained within the broader trend.
Meanwhile, the MACD histogram has slipped into negative territory, with the MACD line trending below its signal line, reflecting short-term momentum fatigue. Importantly, the MACD structure remains relatively flat, indicating that the current weakness is corrective in nature rather than impulsive.
According to O’Neil’s methodology of market direction, Nifty’s breach of the 50-DMA and 25,700 has shifted the market status to an ‘uptrend under pressure.’ Further deterioration into a downtrend is possible if distribution days continue to rise or if the index fails to hold above its 100- and 200-DMA. Conversely, a decisive breakout above 26,373 is required to restore a confirmed uptrend.
The index continues to hover around its 50- and 100-DMA maintaining a mild negative bias in the near term. On the downside, immediate support is placed at 25,500, with a stronger demand zone seen around 25,300, which is expected to cushion any deeper corrective move. From a trend perspective, the broader uptrend is yet to regain momentum, and a sustained move above 26,000 remains crucial.
How did Nifty Bank perform?
Nifty Bank opened marginally flat at 59,330.35 and soon tested lower levels, marking the intraday low at 59,324.20. From there, the index attracted buying interest and rebounded steadily, scaling an intraday high of 59,796.65 before cooling off from the peak. Despite intraday volatility, the benchmark managed to hold most of the recovery and finally closed at 59,580.15, ending on a flat-to-positive note.
The session reflected resilient demand on dips, indicating that bulls are still defending key levels despite intermittent supply near higher zones. Overall, price action suggests a pause within the uptrend, with participants rotating positions rather than exiting aggressively, keeping the broader structure constructive.
The RSI remains in the mid-50s, indicating neutral momentum but with a mild bullish bias as it holds above 50, suggesting dips are being bought rather than sold. The MACD is in positive territory but appears to be flattening, signalling a slowdown in upside momentum and hinting at near-term consolidation rather than a sharp continuation. According to O’Neil’s methodology market direction, Nifty Bank remains in a confirmed uptrend. This implies the broader trend stays supportive, even if the index spends time building a fresh base through time-wise correction.
In the near term, support is placed around 59,300–59,325 (today’s opening/low zone), followed by the 59,000–58,900 area, which can act as a stronger demand pocket if weakness extends. Immediate resistance is seen near 59,800 (today’s high), and a sustained move above 60,000 could trigger follow-through buying and attempt a quick expansion toward the next resistance band around 60,300–60,500 over the next few sessions. If the index fails to clear 59,800 and slips below 59,300, expect a range-bound phase with a mild corrective bias before the next directional move emerges.
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, founded 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.
