Friday, after a volatile session, the Indian equity markets closed on a flat note, as early gains driven by optimism over the new GST reforms were largely erased by profit booking in the latter half of the day. The Nifty 50 eked out a marginal gain, rising 6.70 points, or 0.03%, to settle at 24,741.00, extending its rally for a third consecutive day. Overall, the market appeared to be in a consolidation phase, with low participation and mixed global cues keeping upside capped.
Two stock recommendations by MarketSmith India for 8 September:
Buy: Dixon Technologies (India) Limited (current price: ₹ 17,855)
- Why it’s recommended: Strong Earnings Growth & Reinvention, Robust Revenue Trajectory & Market Tailwinds, Strategic Partnerships & Manufacturing Expansion
- Key metrics: P/E: 113.01, 52-week high: ₹19,148.90, volume: ₹220.34 Cr
- Technical analysis: Reclaimed 21 DMA with above average volume
- Risk factors: High Valuation & Limited Margin of Safety, Macroeconomic Sensitivities & Input Risks, Execution & Integration Challenges
- Buy: ₹ 17,855
- Target price: ₹ 20,500 in two to three months
- Stop loss: ₹ 16,790
Buy: Lemon Tree Hotels Limited (current price: ₹175)
- Why it’s recommended: Strong Recovery & Revenue Momentum, Targeted Expansion in Tier 2/3 Cities
- Key metrics: P/E: 49.80; 52-week high: ₹178; volume: ₹ 162.70crore
- Technical analysis: tight range breakout
- Risk factors: Competitive Pressure & Rental Yield Risks,
- Buy at: ₹173-176
- Target price: ₹199 in two to three months
- Stop loss: ₹ 164
Nifty 50 recap
The Indian equity markets ended flat in a volatile session on September 5, with the Nifty 50 inching up just 6.70 points to close at 24,741, marginally higher by 0.03%. The index traded in a narrow range of 24,621 to 24,832, reflecting caution ahead of key global macro data and persistent foreign outflows. Broader market sentiment remained subdued, as the NSE advance-decline ratio stood at 21:29, indicating more stocks declined than advanced. Sectorally, IT and FMCG stocks lent mild support, while weakness in banks and metals capped gains.
Price action reflects a rejection near the upper trendline of a descending channel, with the index unable to close above the critical confluence of the 50-day (24,963) and 100-day (24,792) simple moving averages, both of which are currently flattening—a sign of neutral short-term momentum. Momentum indicators are showing early signs of recovery but remain inconclusive. The RSI (14) is currently at 49, struggling to break out of a downward sloping channel, suggesting that bulls lack strong conviction unless a move above 52 materializes. Meanwhile, the MACD has turned mildly positive with a recent bullish crossover, but the histogram’s shallow incline indicates limited upward momentum at this stage.
According to O’Neil’s market direction methodology, market status has been downgraded to “Uptrend Under Pressure” as the Nifty breached its “50-DMA” and the “distribution day count” is at three.
The Nifty 50 ended the session on a flat note after a volatile day of trade. The index continued to hover around its 100-day moving average but once again failed to reclaim it, reaffirming the 24,700–24,800 zone as a critical resistance area in the near term. A decisive close above this band would be essential to unlock further upside potential toward the 25,000 level. On the downside, immediate support is placed in the 24,650–24,600 region, with a break below this zone likely to accelerate declines toward 24,500–24,400. Overall, the index remains range-bound, with these key inflection levels on both sides expected to guide the short-term trend.
How did the Nifty Bank Perform?
On Friday, Bank Nifty opened with a sharp gap-up, signaling early strength in the banking space. However, the optimism quickly faded as volatility set in, erasing intraday gains before the index managed a modest green close. On the daily chart, it formed a bullish candle with a lower-high and lower-low structure, reflecting indecision. The index opened at 54,308.05, touched an intraday high of 54,308.05 and a low of 53,719.55, before settling at 54,114.55. This pattern underscores a clear tussle between bulls and bears—strong resistance capped the upside, while selective buying emerged near support levels. The failure to sustain early momentum points to caution among market participants, even as the broader setup retains a constructive bias.
The momentum setup reflects a mixed outlook. The RSI has been moving sideways and is currently placed at 38, suggesting limited scope for recovery. Meanwhile, the MACD remains below the central line with a negative crossover, pointing to sustained bearish pressure. According to O’Neil’s Market Direction Model, Bank Nifty is categorized as an “Uptrend Under Pressure.” In this backdrop, investors are advised to concentrate on fundamentally strong and technically robust stocks, maintain disciplined risk management, and deploy capital selectively into high-conviction opportunities.
From a technical perspective, the index is encountering resistance around 54,500, with the next hurdle placed near 55,300. A sustained close above this zone would be essential to confirm a meaningful recovery. A decisive breakout above 55,000 could further reinforce bullish momentum and open the door for an extended upmove. On the downside, immediate support is placed at 53,500–53,600, and a breakdown below this band may trigger additional selling pressure of nearly 2%, raising the risk of a retest of the 200-DMA.
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.
