Further downside ahead for Nifty? Here's today's outlook and top picks

Ajit Mishra of Religare Broking recommended Glenmark Pharmaceuticals, TVS Motor Company, and Power Finance Corporation for Thursday's session

Market View

Markets traded volatile on the first day of the new expiry series and managed to close in the green, offering some respite after Tuesday’s decline. The Nifty opened on a firm note following supportive global cues and edged higher in early trade. However, pressure in select heavyweight stocks across sectors trimmed most of the gains as the session progressed. Eventually, the index settled near the lower end of the day’s range at 25,482.50. 

Sectoral trends were mixed but tilted on the positive side. Among the key sectors, metal, pharma and auto emerged as the top gainers, while IT stocks also witnessed a rebound after the recent sharp decline. On the other hand, FMCG and realty remained subdued and banking stocks saw some profit booking. Interestingly, the broader markets outperformed despite the choppiness, with both the midcap and smallcap indices gaining in the range of 0.56 per cent–0.91 per cent. 

 

Sentiment improved marginally amid stabilising global cues and a rebound in global technology stocks, which helped ease concerns following the recent sell-off in the IT sector. However, intermittent profit booking and the absence of any fresh positive trigger kept the overall mood cautious. 

On the index front, indications remain mixed as bulls are attempting to defend the crucial support around the 25,400 mark. However, the overall structure still suggests the possibility of further downside. Amid the prevailing uncertainty, a selective approach based on sectoral trends continues to work well, with preference for banking, auto, metal and energy counters for long positions. Participants are advised to focus on opportunities on both sides until a clearer directional trend emerges in the index.

Stocks to Buy - Recommendations by Ajit Mishra

Glenmark Pharmaceuticals Limited | LTP: ₹2,085 | Recommendation: Buy | Target: ₹2,230| Stop-loss: ₹2,010 

We are observing mixed trend within the pharma pack wherein Glenmark Pharmaceuticals is exhibiting a constructive bullish setup, with the price sustaining above its key moving averages and maintaining a sequence of higher lows, reflecting strengthening trend momentum. Recent pullbacks have been shallow and orderly, supported by healthy volumes, indicating demand emerging at lower levels. The current price behavior suggests a phase of consolidation with a positive bias rather than distribution. Momentum indicators across multiple timeframes are gradually improving, supporting the likelihood of trend continuation.  

Power Finance Corporation Limited | LTP: ₹423.60 | Recommendation: Buy | Target: ₹454 | Stop-loss: ₹408 

Power Finance Corporation is showing signs of trend continuation, after its breakout from a one and half years long corrective phase early this month, marked by the formation of fresh base around the short term moving average i.e. 20-day double exponential moving average (DEMA). The prevailing buoyancy in the energy space combined with its chart structure is pointing towards a steady rise ahead. We thus advise considering fresh longs positions as per the recommended levels during the prevailing phase as it offers reasonable risk to reward in the current market scenario.  

TVS Motor Company Limited | LTP: ₹3,93 |  Recommendation: Buy | Target: ₹4,210 | Stop-loss: ₹3,780 

Auto is among the top performing sectors at present and TVS Motor Company is one of the steady contributors in the pack. It has witnessed a fresh breakout today, accompanied by a noticeable expansion in volumes, signalling strong market participation and the potential for further upside in the near term. The stock continues to trade firmly above its key short- and medium-term moving averages on multiple time frames and made a new record high as well, highlighting sustained buying interest. Overall, the prevailing technical structure supports trend continuation, with intermediate pullbacks likely to present buying opportunities.   

===============  (Disclaimer: Ajit Mishra is senior vice president of research at Religare Broking. Views expressed are his own.)