The Nifty 50 closed 96.25 points (0.37%) lower at 25,795.15 and the Sensex shed 344.52 points (0.41%) to settle at 84,211.88, ending a six-day rally. Market breadth was clearly negative across the board as the Nifty 50 failed to sustain its momentum above the crucial 26,000 mark.
Geopolitical factors, including reports of a potential U.S. trade probe concerning China, dampened investor confidence. Technically, the sharp reversal from intraday highs confirms the index is in an overbought zone, suggesting a period of consolidation.
Two stock recommendations for 27 October by MarketSmith India
Buy: Aadhar Housing Finance (current price: ₹522)
- Why it’s recommended: Strong foothold in affordable housing, backed by Blackstone, ensuring stability, steady loan growth, and improving asset quality, healthy margins and profitability, rising housing demand in smaller cities
- Key metrics: P/E: 23.20, 52-week high: ₹547.80, volume: ₹33.24 crore
- Technical analysis: Reclaimed the 50-DMA on above average volume
- Risk factors: Sensitive to interest rate changes, exposure to lower-income borrowers, growing competition in housing finance, dependent on economic stability, regulatory or policy changes
- Buy: ₹518–530
- Target price: ₹595 in two to three months
- Stop loss: ₹490
Buy: Sterlite Technologies Limited (current price: ₹119.80)
- Why it’s recommended: Strong secular demand for optical fibre and connectivity infrastructure, expansion into data center-related portfolios
- Key metrics: P/E: N/A; 52-week high: ₹140; volume: ₹15.38 crore
- Technical analysis: Breakout retest
- Risk factors: Capacity utilisation and margin risk, geographical/market risk
- Buy at: ₹118-120
- Target price: ₹132 in two to three months
- Stop loss: ₹114.80
How the market performed on 24 October
Indian equities ended lower on Friday as risk aversion persisted amid weak global cues and profit-booking in heavyweight sectors. The Nifty 50 slipped 96 points (-0.37%) to close at 25,795.15, while the Sensex lost around 345 points to settle near 84,211.88. The broader market mirrored this cautious sentiment, with the advance-decline ratio at 1,235:1,849, indicating broad-based selling pressure.
Losses were led by FMCG (-0.75%), healthcare (-0.83%), private banks (-0.81%), and pharma (-0.55%), while metal (+1.03%) and oil & gas (+0.20%) gained. Persistent foreign fund outflows and concerns over global bond yields weighed on investor sentiment.
The Nifty 50 extended its mild correction over the past two trading sessions, as selling emerged near 26,000. Price action indicates consolidation after a sharp rally, though the index continues to trade comfortably above its key moving averages, keeping the broader trend positive.
The RSI (68) has cooled slightly from overbought levels, reflecting a pause in momentum rather than weakness. Meanwhile, the MACD remains in positive territory with a bullish crossover intact, though its histogram shows early signs of flattening. Overall, the setup suggests a healthy consolidation within an ongoing uptrend, with short-term sentiment remaining cautiously positive.
According to O’Neil’s methodology of market direction, the market has been shifted to an “Confirmed Uptrend” as the index decisively surpassed its previous rally high of 25,670 to register a new 52-week.
The Nifty 50 touched a fresh 52-week high near 26,100 before witnessing profit-booking at higher levels. The index will likely continue to maintain a bullish structure if it holds above the 25,400 mark, which aligns with the breakout zone of the downward-sloping trendline. On the technical front, Nifty now faces a critical resistance zone between 26,000 and 26,300, and a decisive move above this range could pave the way for new all-time highs. On the downside, 25,450 acts as immediate support, while a stronger base has been established around the 25,000 level, reinforcing strength of the broader uptrend.
How did Nifty Bank perform?
The Bank Nifty opened on a positive note but turned volatile as the session progressed, remaining in negative territory for most of the day. The index settled at 57,699.60, after opening at 58,172.75, recording an intraday high of 58,232.90 and a low of 57,482.05, reflecting a modest decline of 0.65%. The movement indicates profit-booking following a strong upward run in recent sessions. Despite the mild correction, the broader trend remains constructive, with the index holding well above key moving averages. A brief consolidation or flag formation suggests a healthy pause before the next upward move.
The RSI (14) currently stands at 68.69, slightly below the overbought zone, indicating a mild slowdown in momentum after recent gains but still maintaining strength above the 60 level, which signals sustained bullish undertone. The MACD (12.26) remains in positive territory, with the signal line comfortably below the MACD line, reaffirming ongoing upward momentum. However, a narrowing histogram suggests momentum moderation, hinting at short-term consolidation before renewed buying interest emerges.
Overall, the trend remains constructive, with any dips toward support zones likely to attract renewed buying interest. If the index sustains above its key moving averages, the medium-term outlook will remain firmly bullish, with momentum continuing to favor the upside. Immediate support is now positioned near 57,500, followed by a stronger base around 56,000. On the upside, a decisive move above 58,550 could initiate the next leg of the rally, paving the way for a move toward the 60,000 mark. However, minor consolidation may occur after the recent sharp advance.
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.
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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.
