The domestic benchmark equity indices, the Sensex and the Nifty 50, began Thursday’s trading session on a positive note, with the Sensex opening 96.95 points higher at 77,434.54 and the Nifty 50 gaining 21.40 points to 23,537.40. However, the initial optimism soon gave way to a flat-to-negative trading pattern due to mixed global signals.

The early trading activity suggested a cautious yet hopeful outlook among traders, with sectoral performance predictions influencing the market’s direction. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that the market is currently undergoing a significant sectoral shift. Large amounts of investment are flowing into well-priced large-cap banking stocks, while sectors like capital goods, communications, metals, and FMCG are seeing profit booking. This trend is expected to persist, which is seen as a positive development. Meanwhile, the overvalued broader market segment is experiencing a pause.

Despite the initial firm start buoyed by positive global cues, the market saw some hesitation and profit booking in the early trading hours. However, the bulls demonstrated resilience, pushing the market into new highs, although this upward momentum was short-lived as profit booking re-emerged in the final hours. Eventually, the Nifty 50 index closed just above 23,500, with a slight loss of 0.18 percent, as explained by Osho Krishan, Senior Analyst, Technical & Derivatives at Angel One.

The benchmark index ended its five-day winning streak with minimal changes on the price chart. Notably, the formation of a Bearish candle at the elevated zone calls for caution. From a technical perspective, the consolidation zone from the previous week, around 23,400-23,300, is expected to provide support in case of minor price fluctuations in the upcoming sessions, followed by a stronger support level at 23,200. On the upper side, the price range of 23,650-23,700 is seen as an immediate resistance level. Traders should closely monitor these key levels as they will be crucial for making strategic decisions in their trades, Krishan advised.

Looking forward, sector rotation is expected to continue playing a significant role for traders. The banking sector has shown strong performance and is likely to further support the benchmark index. Therefore, a stock-centric approach is recommended for achieving outperformance, added Osho.

Top Stock Recommendations For Thursday by Osho Krishan
Sundaram Finance Ltd
Sundaram Finance has been on an upward trend, characterized by higher highs and higher lows over a broader time frame. The stock is trading above all its Exponential Moving Averages (EMAs) on the daily chart. Recently, it has bounced back from the 100-day Exponential Moving Average (DEMA), which has historically been a strong support zone. The MACD and 14-period RSI indicators are suggesting a trend reversal, indicating a favorable risk-reward ratio for short to medium-term investment.

Recommendation: BUY Sundaram Finance around ₹4,700-4,680 with a stop loss of ₹4,390 and a potential target of ₹5,000-5,040.

Persistent Systems Ltd
Persistent Systems has seen a significant price increase in recent trading sessions from the crucial 200-day Simple Moving Average (SMA) zone on the daily chart. The stock is also witnessing a positive crossover of the 21-day EMA to the 50-day EMA, indicating a positive trend. Historically, the stock has shown strong support at critical levels. The 14-period RSI and MACD both signal a continuation of the upward movement, suggesting a potential upside.

Recommendation: BUY Persistent Systems around ₹3,820-3,800 with a stop loss of ₹3,600 and a potential target of ₹4,100-4,140.

In conclusion, while the market exhibited some volatility, strategic sectoral investments and stock-specific approaches can yield favorable results. By focusing on well-performing sectors and making informed decisions based on technical indicators, traders can navigate the market more effectively.
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