Stock recommendations for 3 August from MarketSmith India | Stock Market News

Stock market recap: Benchmark equity indices, the Sensex and the Nifty 50, ended higher for the third consecutive session on Friday, 21 July, amid mixed global cues and a downtick in crude oil prices.

The Sensex ended 166 points, or 0.21%, to end at 78,094.64, while the Nifty 50 settled at 24,383.60, up 66 points, or 0.27%. Broader markets also mirrored positive sentiment; the Nifty Midcap 100 and Smallcap 100 indices rose by 0.44% each.

The overall market capitalization of the BSE-listed firms rose to nearly ₹486 trillion from ₹483 trillion in the previous session.

Both the Sensex and the Nifty 50 rose more than 2% in July, extending gains for the second consecutive month. However, year-to-date, the Nifty is down 7%, and the 30-share pack is down over 8%.

Two stock recommendations by MarketSmith India:

Buy: Confidence Petroleum India Ltd (current price: ₹80)

Buy: Gabriel India Ltd (current price: ₹1,446)

Indian equity markets extended their winning streak for a third consecutive session, supported by strength in financials, autos and select heavyweight stocks. Nifty 50 closed at 24,383.60, up 66.45 points (+0.27%), after trading in a range of 24,299.70–24,429.40, while holding comfortably above its previous close of 24,317.15.

Market breadth remained firmly positive, with 2,068 stocks advancing and 1,255 declining, while 112 stocks remained unchanged, indicating broad-based buying interest beyond the benchmark indices. On the sectoral front, Nifty Media (+2.09%), Auto (+1.64%), Financial Services (+1.17%), and Oil & Gas (+1.08%) led the gains, whereas IT (-1.56%) and FMCG (-1.05%) underperformed amid sector-specific profit booking.

Investor sentiment was aided by positive global cues and continued buying in large-cap Financial and Automobile names, helping offset weakness in technology stocks.

Nifty 50 continues to exhibit a constructive technical setup, closing above its short-term moving averages while forming a series of higher-highs and higher-lows, reflecting sustained buying interest. Notably, the index has registered a small breakout above a downward-sloping trendline, indicating that the recent corrective phase may be easing and bullish momentum is gradually strengthening.

The Relative Strength Index (RSI) climbed to around 59, moving above its signal line and remaining comfortably above the neutral 50 mark, suggesting improving momentum without entering overbought territory. Meanwhile, the MACD has turned positive, with the MACD line crossing above the signal line and the histogram expanding into positive territory, reinforcing the likelihood of continued upward momentum.

The index staged a strong rebound, reclaiming its 21-DMA with the rising trendline, indicating an improvement in near-term market sentiment. However, sustaining these levels will be crucial to reinforce the ongoing recovery. On the downside, a decisive break below 23,600 could trigger renewed selling pressure, exposing the index to 23,300, and further downside risk toward 23,000.

On the upside, the index needs to decisively reclaim and sustain above 24,400 to signal a meaningful revival in bullish momentum. Such a move would also confirm a breakout from the recent consolidation range, strengthening the overall technical structure and increasing the probability of an advance toward 24,500–24,600.

Indian equity benchmarks closed slightly higher, with Bank Nifty ending 0.21% higher at 57,264.85 (+117.35 points) after finding resistance near 57,400. Mid-tier private lenders spearheaded gains, with AU Small Finance Bank (+1.00%), IDFC First Bank (+0.88%), and Federal Bank (+0.73%) outperforming Meanwhile heavyweights like IndusInd Bank (-1.07%) and HDFC Bank (-0.48%) underperformed and limited broader index expansion.

Macroeconomic sentiment remained steady, anchored by resilient foreign portfolio inflows, robust domestic growth metrics, and stable global cues following recent US. Federal Reserve policy commentary. Market breadth favored advances slightly with an advance-decline ratio of 1.1:1 across financial counters.

Nifty Bank continues to display a cautious yet improving technical structure, with recent price action indicating consolidation after the previous up-move. The index formed a modest rebound from lower levels and is attempting to regain momentum. However, it continues to trade between its 50- and 200-DMA, reflecting an indecisive medium-term trend. Importantly, the 200-DMA is acting as stiff resistance, capping upside attempts and preventing a decisive bullish breakout.

On the momentum front, the RSI is hovering around the neutral 50 mark, suggesting balanced buying and selling pressure with no clear momentum dominance. Meanwhile, the MACD remains below the signal line, although the negative histogram has narrowed, indicating that bearish momentum is gradually easing and selling pressure is losing intensity.

Immediate support for Nifty Bank is placed near 56,750–56,550, coinciding with the recent swing low and the 50-DMA, while stronger support is seen around 55,700, near the 100-DMA. On the upside, immediate resistance is located at 57,450–57,550, aligned with the 200-DMA, followed by a stronger hurdle near 57,900–58,000. The index is likely to remain range-bound in the near term as investors await fresh domestic earnings, global central bank cues, and developments in overseas markets.

A sustained move above 57,550 could trigger renewed buying interest and improve sentiment, whereas a breakdown below 56,750 may invite further profit-booking and increase downside pressure.

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.

Trade name: William O’Neil India Pvt. Ltd.

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.

MarketSmith India breaks through the market clutter to bring actionable investment ideas into focus. Our founder and legendary investor, William J. O'Neil, studied these trends and formulated the pathbreaking methodology, the CAN SLIM®. For over five decades now, MarketSmith has been successfully delivering great investment ideas based on its investment philosophy.

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