2 top stock recommendations from Rajesh Palviya

Synopsis

Indian equity markets ended the week flat amidst volatile trading, with benchmark indices consolidating. Broader markets, however, showed strength, particularly in midcaps, smallcaps, auto, and real estate sectors. Experts suggest continued consolidation for Nifty until a breakout above 24,400, while recommending selective bets in private banks and NBFCs.

Indian equity markets ended the week on a flat note after a volatile trading session, with benchmark indices continuing to move within a narrow consolidation band. While frontline indices struggled to decisively move higher, broader markets remained active, with strong participation seen in midcaps, smallcaps, auto, real estate, and select financial names.

According to market expert Rajesh Palviya from Axis Securities, the Nifty continues to face stiff resistance near the 24,300-24,400 zone, while support remains intact around 24,000.

“The week gone by has seen its own ups and downs, but we have ended absolutely flat,” ET Now said while discussing the market setup for the coming week.

Palviya said, “So, Nifty is still consolidating in the range only, 24,000 on the downside and on the higher side 24,300, 24,400 is the supply zone for the Nifty at this juncture.”

He pointed out that derivative data also reflects a tightly packed trading range. “Looking at the derivative data also major call writing activity has been witnessed at 24,300, even 24,400 strike for this week. On the other hand, the put base concentration is placed at 24,000-24,100 strikes.”

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Stock-Specific Action Dominates

With the earnings season in full swing, traders are increasingly shifting focus from index-based trades to stock-specific opportunities.

“Market is focusing more on the sector as well as on the stock specific action as its earnings season is going on. So, stock related move is going on in the market and traders and investors are focusing more on the stocks rather to trade on the Nifty,” Palviya said.

He believes the market could continue consolidating until a decisive breakout above 24,400 emerges.

“So, once we take out 24,400, then only we could see substantial short covering action to play out, but multiple times we have seen that Nifty failed to cross this level in last couple of weeks, so some more consolidation is likely to be there.”

Bank Nifty Faces Resistance Near 56,000

The banking pack also remains range-bound, especially after weaker-than-expected earnings from State Bank of India weighed on sentiment in PSU banks.

“And Bank Nifty is again witnessing major supply pressure at 56,000 levels, that is the major challenging level for the Bank Nifty also and we have seen most of the PSU banks have witnessed the profit taking due to the slightly weaker number from the SBI front,” Palviya said.

He expects Bank Nifty to remain trapped between 54,500 and 56,000 in the near term.

“So, Bank Nifty may also consolidate furthermore in the range of 54,500 to 56,000 for next couple of weeks and once we get the breakout on the higher side above 56,000, then rally may extend.”

Despite index consolidation, Palviya remains constructive on the broader trend. “But broader market is looking attractive. So, till Nifty is holding 24,100, buy on dip should be the strategy in the market.”

Private Banks Holding Ground Despite SBI Weakness

On the outlook for financial stocks after SBI’s earnings disappointment, Palviya believes selective opportunities remain available in private banks and NBFCs.

“So, if we exclude SBI from this basket, rest other stocks like from the banking space itself, from the private banking space some of the stocks are still holding the ground,” he said.

He highlighted names such as Kotak Mahindra Bank, IndusInd Bank, Federal Bank, and AU Small Finance Bank as banks showing resilience.

“So, trend is still intact on the bullish side for this bank, but yes, PSU banks are still struggling to cross their near-term, short-term supply zone.”

Palviya also sees strength in the NBFC space.

“So, we may see some pressure in PSU banking basket, but NBFC space is also looking attractive, stock like LIC Housing Finance, Bajaj Finance all these stocks are showing sign of strength. So, one may remain selective to bet on banking and financial space.”

Top Stock Picks for the Week

Palviya recommended two stocks on the long side for positional traders.

The first pick is Amber Enterprises India.

“So Amber enterprises one can buy for upside target of 9200, on the downside 8700 needs to keep as a stop loss,” he said, adding that the stock continues to consolidate at higher levels after a strong rally.

The second recommendation is CG Power and Industrial Solutions.

“Stock managed to give breakout of it's previous swing high of October 2024, swing high breakout is already took place for CG Power, so it is a long-term breakout took place for CG Power.”

He added, “So, one can buy and accumulate this stock, on the downside one needs to keep a stop loss of 855, upside target we are projecting around 910 to 920.”

Midcaps and Smallcaps Continue to Shine

The broader market remained one of the biggest highlights of the week, with sustained buying emerging across midcap and smallcap counters.

“So, we believe that smallcap and midcap both spaces are looking attractive and lot many stocks have done well in last couple of trading sessions,” Palviya said.

He believes the broader market strength is a positive sign for the benchmark index as well.

“So, as broader market is showing sign of strength which is a clear sign that sooner or later Nifty is also poised to give breakout and once we see breakout above 24,400, we may see a more buying interest in midcap and smallcap space.”

Among sectors, Palviya identified sugar, real estate, and chemicals as pockets witnessing fresh buying interest.

“So, some of the pockets like stocks from the sugar space, stocks from real estate space, these all sectors are showing strength, even chemical basket is also attracting some buying interest from the lower level.”

Auto Stocks Drive Momentum

The auto pack emerged as one of the strongest sectors of the week, with the Nifty Auto index rallying over 5%.

Palviya remains positive on both auto and auto ancillary companies.

“Yes definitely. So, Samvardhana Motherson International is looking promising. The way stock has managed to cross 128-130 level, I think here we could see a continuity of uptrend.”

He expects the stock to move towards the 140-145 range on a positional basis.

Palviya also highlighted Bajaj Auto as another strong chart setup.

“Even Bajaj Auto has also managed to give breakout and the way stock is now trading above 10,500 mark, if it continues to hold these level, the next target for Bajaj Auto would be around 11,200.”

Summing up the sectoral view, he said, “So, most of the automobile stocks are showing sign of strength and we see this sector may continue further as most of the stocks are enjoying their near-term, short-term breakout level. So, auto, auto ancillary both space one can look at at this juncture and we believe that this momentum may extend further.”

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(You can now subscribe to our ETMarkets WhatsApp channel)

(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today.

Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

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