Upmove or consolidation? Ajit Mishra's market outlook and top stock picks

Market View

 

Markets traded within a narrow range following Tuesday’s dip but managed to close slightly higher. The session began on a positive note, supported by encouraging factors such as easing retail inflation and stable global cues. However, the absence of sustained buying interest and a mixed performance among heavyweight stocks limited further gains as the day progressed. Eventually, the Nifty closed at 24,666.90, up by 0.36 per cent. 

 

Most key sectors contributed to the upmove, with the exception of banking. Notably, metal, realty, and energy sectors were among the top performers. The broader markets also witnessed strong interest, with both midcap and smallcap indices gaining over 1 per cent. We believe this is a healthy pause in Nifty following Monday’s rally, and it may continue for another session or two. In the meantime, traders should maintain a stock-specific approach and use this consolidation phase to accumulate fundamentally strong names. Alongside key sectors, themes such as defense, railways, and PSU banking are also offering trading opportunities. However, it's important to maintain a balanced view and avoid excessive exposure. 

 

Stocks Recommendations

 

Ashok Leyland Limited | LTP: 234.53 | Buy | Target: 249 | Stop-loss: 227

 

Ashokley witnessed a breakout from its multi-month declining channel, marking the end of its corrective phase. The stock then traded in a range, forming an elevated base near the breakout zone, which aligns with its 20 WEMA. It has now surpassed this range with notable surge in volumes, looking set to resume its longer term uptrend. Traders can initiate longs in the mentioned range.

 

NBCC (India) Limited | LTP: 106.75 | Buy | Target: 114| Stop-loss: 103

 

NBCC has breached the resistance zone around 104–105, accompanied by a strong surge in volumes. The stock has also reclaimed key moving averages across multiple timeframes, reinforcing the positive outlook. Additionally, renewed momentum in the broader market further supports the bullish sentiment. 

 

Steel Authority of India Limited | LTP: 116.58 | Buy | Target: 124 | Stop-loss: 112

 

Metal stocks have finally found some footing after a prolonged corrective phase. SAIL, in particular, has established a strong base above its long-term average, the 200-week exponential moving average (200 WEMA), following a breakout from a declining trendline. The stock now appears poised to gradually move higher, signaling a potential reversal of its year-long correction. 

(Disclaimer: This article is by Ajit Mishra, SVP-research at Religare Broking. Views expressed are his own.)