Trading guide: Nifty reflects caution; PNB, Indus Towers top stocks to buy

Analyst recommends maintaining a positive bias while focusing on stock selection. PNB, SAIL and Indus Towers are among the top stocks to buy

Market View

Markets traded volatile and ended marginally lower, continuing the prevailing consolidation phase. After an initial uptick, the Nifty gradually drifted lower through most of the session; however, a bounce in the final hour helped trim some losses. Eventually, the Nifty50 index settled at 25,453.40, down by 0.35 per cent.

 

On the sectoral front, the trend remained mixed, with metals, pharma, and auto sectors ending in the green, while realty and banking came under pressure. The broader indices also witnessed choppy trade and closed flat to marginally in the red.

 

While global markets continue to display strength, the recent pause in Nifty reflects caution, as participants await fresh triggers to resume the uptrend. We recommend maintaining a positive bias while focusing on stock selection, especially in sectors showing relative outperformance, with an eye on the risk-to-reward ratio. 

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Stocks Recommendations

Buy Indus Towers | LTP: ₹423.25 | Target: ₹450 | Stop-loss: ₹408

Indus Towers has been consolidating in a cup and handle formation over the past nine months, following a correction from its record high of ₹460.30. During this phase, the stock established a strong base above the neckline of its previous breakout zone and consistently held above key moving averages, underscoring the strength in its structure. 

 

Recently, it has registered a decisive breakout from this pattern, which may lead to a continuation of the prevailing uptrend. Traders may consider initiating long positions at the specified levels. 

Buy Punjab National Bank | LTP: ₹113.85 | Target: ₹121 | Stop-loss: ₹109

Following a prolonged corrective phase, PNB stock is showing strong signs of a trend reversal. The stock first breached its daily trend line resistance while forming an Inverted Head and Shoulders pattern. A subsequent breakout above the neckline provides dual confirmation of the reversal and signals the beginning of a fresh uptrend. This setup offers a favourable opportunity to initiate long positions at the recommended levels. 

Buy Steel Authority of India | LTP: ₹137.48 | Target: ₹148 | Stop-loss: ₹132

Metal stocks are seeing renewed buying interest, and SAIL is moving in line with the trend. The SAIL stock has been gradually inching higher following a breakout from its corrective phase. It has now formed a fresh buying pivot after a brief dip, demonstrating continued strength. 

 

With the stock trading well above the confluence of its key moving averages, the recent price action, combined with the sector’s momentum, suggests a likely continuation of the uptrend.  Disclaimer: Ajit Mishra is SVP-Research at Religare Broking. Views expressed are his own. For further disclaimer from the analyst, visit: https://religareonline.com/disclaimer)