Stock recommendations today: MarketSmith India's top picks for 26 June

Additionally, a weaker US dollar and firm cues from Asian peers contributed to the positive momentum. Broad-based sectoral participation further reinforced the rally, enabling the index to break out of a five-week consolidation phase and surpass the key resistance zone around 25,200.

Two stock recommendations by MarketSmith India:

Buy: KEC International(current price: ₹927.70)

• Why it’s recommended: Robust segmental revenue growth, margin improvement and debt reduction, positive management commentary.
• Key metrics: P/E: 42.64, 52-week high: ₹ 1,313, volume: ₹ 434 crore
• Technical analysis: 200-DMA retake, bullish price-momentum structure
• Risk factors: High leverage and low interest coverage, geopolitical and commodity price risk, key execution challenges.
• Buy at: ₹ 927
• Target price: ₹ 1048 in two to three months
• Stop loss: ₹ 867

 

Buy: Birlasoft (current price: ₹443.65)

• Why it’s recommended: Strong focus on digital and cloud business, strategic partnership, operational efficiency, and strong financials.
• Key metrics: P/E: 24.04, 52-week high: ₹ 760.45, volume: ₹ 290.84 crore
• Technical analysis: 100-DMA retake, rectangular price pattern breakout
• Risk factors: Intense competition, client concentrations, risk of margin contraction.
• Buy at: ₹ 443.65
• Target price: ₹ 520 in two to three months
• Stop loss: ₹ 408

Nifty 50 Recap

On Wednesday, Nifty50 opened with a gap-up and sustained a positive trajectory throughout the session, trading within the range of 25,125–25,267. The index decisively crossed the immediate resistance at 25,200, closing above it after a five-week consolidation phase. The price action resulted in the formation of a bullish candle on the daily chart. All sectoral and broader market indices ended in the green, led by strong gains in IT, Auto, and Consumption stocks, while Banking and Financials lagged. Market breadth was robust, with an advance–decline ratio of nearly 3:1 favoring gainers.

Technically, Nifty50 continues to trade above all its key moving averages across multiple timeframes, reinforcing the underlying bullish structure. The recent breakout on the daily chart adds to the positive setup. Momentum indicators also support this view, with the relative strength index (RSI) firming up around 61, signaling an improvement in upward momentum. Additionally, the daily MACD has generated a positive crossover, suggesting a strengthening trend and further potential for upside continuation.

According to O'Neil’s methodology of market direction, Nifty has reclaimed its recent high of 25,116. Hence, the market status has been upgraded to a Confirmed Uptrend as of June 11, 2024.

Nifty50 maintained a bullish bias and ended above the key resistance level of 25,200. Going forward, sentiment is expected to remain constructive as long as the index sustains above this threshold, potentially paving the way for an upward move toward 25,700–25,800 in the coming sessions. However, a failure to hold above 25,200 could result in renewed volatility and a return to range-bound consolidation. On the downside, immediate support is seen near 25,000, with strong support around 24,750.

How did Nifty Bank Perform?

Nifty Bank gained 0.28% on Wednesday, ending the session with a positive bias. While the overall trend remains constructive, the index formed a small bullish candle on the daily chart but failed to surpass the previous day's high, indicating limited upside momentum. Notably, Nifty Bank underperformed compared to Nifty50. In parallel, the broader financial sector index, FINNIFTY, posted a gain of 0.38%, reflecting broader participation within the financial space, though with a similarly moderate strength.

From a technical perspective, this key sectoral index remains above all major moving averages across multiple timeframes, affirming the bullish undertone in the banking space. On the daily chart, the RSI is trending upward and currently hovers around 60, indicating strengthening momentum. However, the MACD continues to reflect a negative crossover, suggesting possible near-term consolidation. On the weekly timeframe, both the RSI and MACD are exhibiting positive trends, reinforcing the medium-term bullish outlook.

According to O’Neil’s methodology of market direction, Bank Nifty has recently transitioned from an “Uptrend Under Pressure" to a bullish phase of a “Confirmed Uptrend,".

The index maintained a positive bias, closing above 56,500 despite intraday volatility. The near-term outlook remains constructive, provided it remains above the key support at 56,000. A decisive breakout above 57,000 could accelerate bullish momentum, potentially propelling the index toward 58,500–59,000 in the coming sessions. On the downside, immediate support is seen at 56,000, with a secondary cushion around 55,500, both of which are expected to limit short-term corrective moves.

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.

Sebi Registration No.: INH000015543

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.