Buoyed by the Fed rate cut, strong buying activity from lower price levels clearly signals an encouraging revival toward the upside. Although resistance persists at higher levels, the market’s immediate downward pressure has eased.
How the stock market performed on 11 December
The Sensex climbed 400.62 points (0.47%) to close at 84,791.90, after swinging between highs and lows during a volatile derivatives expiry session. Similarly, the Nifty50 advanced 136.55 points (0.53%) to settle at 25,894.55, ending near its intraday peak as investors cheered the U.S. Federal Reserve’s 25-basis-point rate cut, which boosted global risk appetite.
Sectoral indices across the board finished in the green, led by auto, pharma, PSU banks, private banks, metals, and realty, each gaining 0.5-1%. Market breadth remained positive, with mid- and small-cap indices also contributing to the uptrend.
Among individual performers, Eternal, Kotak Mahindra Bank, and Jio Financial Services rose up to 2%, while Trent and Bharti Airtel slipped nearly 1%. Overall, the session reflected renewed optimism, with 1,869 stocks advancing against 1,575 declines.
Outlook for Trading
After a sharp decline the much-wanted relief rally did emerge on the Sensex expiry as the Fed rate cut produced a strong upward bounce. Overall sentiment still remains cautious, but moves in select stocks is keeping momentum alive.
On the daily charts we can see the breach of the KS lines that were important supports. Additional support in the form of a gap support region remains the zone to watch. Levels of around 25,700 once again came to the rescue and hold back selling pressure. While the RSI has briefly revived, the trends still remain suspicious and will encounter selling pressure as the 26,0000 level (spot) has a high possibility of sparking selling pressure. With no clarity on macros or the geopolitical scenario we should maintain a sell-on-rally approach until we get a close above 26,000 in Nifty spot once again.
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With PCR slightly inching above 1 we can hope for a rebound that continues to attract buying. As Max Pain is at 25,900, we are entering the last trading day of the week with the difficult task of hoisting the index above 26,000. Overall sentiment is muted, so trade lightly.
Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman
LTIM (current price ₹6294.95)
LTIM: Buy above ₹6310, stop ₹6210 target ₹6650 (Multiday)
- Why it’s recommended: LTIMindtree Ltd., a subsidiary of the Indian conglomerate Larsen & Toubro, is a global technology consulting and digital solutions company formed by the merger of the erstwhile L&T Infotech (LTI) and Mindtree. A strong long body bullish candle seen on Friday has ignited some strong bullish sentiments. With the RSI taking support at 60 levels and rising we can look at possibility of more upside in the coming days. A dip into the TS region and a rebound augurs well for a revival. Consider going long.
- Key metrics:
- P/E: 38.85,
- 52-week high: ₹6767.95,
- Volume: 6.39M.
- Technical analysis: Support at ₹6150, resistance at ₹6650.
- Risk factors: Geographic concentration, intense competition, talent retention and cost, and the general global economic environment.
- Buy : above ₹6310.
- Stop loss: ₹6210.
- Target price: ₹6650 in 2 months.
BANDHANBNK (current price: ₹145.29)
BANDHANBNK: Buy above ₹146, stop ₹144 target ₹149.50 (Intraday)
- Why it’s recommended: Bandhan Bank Ltd. is an Indian universal bank known for financial inclusion, headquartered in Kolkata, focused on underbanked areas with diverse personal/business banking, loans, insurance, and digital services. After sharp sell off the prices have reached a strong set of valuation support and are seen rebounding. Also, the RSI is seen reviving from deep oversold levels suggesting a strong possibility to move higher.
- Key metrics:
- P/E: 19.06,
- 52-week high: ₹192.45,
- Volume: 6.39M.
- Technical analysis: Support at ₹136, resistance at ₹152.
- Risk factors: Asset quality challenges in its microfinance portfolio, significant geographical concentration.
- Buy : above ₹146.
- Stop loss: ₹143.
- Target price: ₹151.
TATASTEEL (current price: ₹166.38)
TATASTEEL: Buy above ₹167, stop ₹164.50 target ₹171 (Intraday)
- Why it’s recommended: Tata Steel Ltd is one of the world’s most geographically diversified steel producers and a major part of the century-old Tata Group conglomerate. After a consolidation the stock is seen slipping lower and a formation of a long body candle that is heading below is indicating bearishness. With the trends in RSI seen below the neutral zone the stock could be under pressure. Look to go long.
- Key metrics:
- P/E: 38.73,
- 52-week high: ₹187,
- Volume: 1.91M.
- Technical analysis: Support at ₹148, resistance at ₹175.
- Risk factors: Currency fluctuations, intense competition, reliance on specific industry verticals, and rapid technological changes
- Buy : above ₹167.
- Stop loss: ₹164.50.
- Target price: ₹171
Raja Venkatraman is co-founder, 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.
