The Nifty 50 was volatile on Wednesday, closing with a slight gain of 0.14% amid geopolitical tensions as India’s ‘Operation Sindoor’ targeted terror hubs in Pakistan. Initial losses were recovered as investors shrugged off fears of an escalation. Gains in defence and textile stocks, optimism from the India-UK free trade deal, strong FII inflows, and Tata Motors’ restructuring boost helped support the index.
Two stock recommendations by MarketSmith India for 8 May
SRF (current price: ₹3,055)
- Why it’s recommended: Strong position in specialty chemicals, capacity expansion
- Key metrics: P/E: 75.68; 52-week high: ₹3,085.00; volume: ₹285.36 crore
- Technical analysis: Tight area breakout
- Risk factors: Raw material price volatility, competition
- Buy at: ₹3,055
- Target price: ₹3,390 in three months
- Stop loss: ₹2,890
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Cholamandalam (current price: ₹1,574)
- Why it’s recommended: Strong presence in vehicle finance, healthy asset quality
- Key metrics: P/E: 30.21; 52-week high: ₹743; volume: ₹384.38 crore
- Technical analysis: Cup with handle breakout
- Risk factors: Interest rate risk, competition from banks and fintechs
- Buy at: ₹1,574
- Target price: ₹1,790 in three months
- Stop loss: ₹1,465
How the Nifty 50 performed on 7 May
The Nifty 50 opened on a weak note on Wednesday amid geopolitical tensions, but quickly recovered. It remained volatile throughout the session before closing with a modest gain. It formed a green candlestick on the daily chart, although it failed to surpass the previous day’s high. Sector-wise performance was mixed. While Nifty FMCG and pharma closed in the red, other key sectors such as auto, realty, energy and banking posted gains. Market breadth remained positive, with the advance-decline ratio closing at approximately 2:1, suggesting broader participation in the recovery.
From a technical standpoint, the Nifty 50 continues to trade above all key moving averages on the daily chart, indicating underlying strength. However, price action over the past couple of weeks suggests a phase of sideways consolidation within the 24,000–24,500 range. Both the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) are moving sideways, signaling a pause in momentum and a lack of clear directional bias in the near term.
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According to O’Neil’s methodology of market direction, Nifty 50’s status transitioned from a ‘rally attempt’ to a ‘confirmed uptrend’.
The index managed to cross and close above 24,400 in a volatile trading session. The price and momentum structure on the daily chart continues to indicate consolidation within the 24,000–24,500 range. Going forward, a decisive breakout above 24,450–24,500 could trigger renewed bullish momentum, potentially pushing the index toward 24,800–24,900 in the coming days. Conversely, if the index trades below 24,400, it may continue to experience volatile, range-bound movement.
How did Nifty Bank perform?
On Wednesday, Nifty Bank had a gap-down opening but quickly recovered and remained volatile throughout the session. The index gained 0.63% and formed a bullish candle, although it failed to surpass the previous day’s high. Notably, while the day’s candle was bullish, the overall structure reflected a lower top and lower bottom, suggesting continued caution. Nifty Bank opened at 54,013, moved within 53,920-54,684, and closed at 54,610.
From a technical perspective, Nifty Bank continues to trade above its key moving averages, indicating underlying strength. However, the recent consolidation phase reflects a loss of momentum and signals a potential short-term pause in the ongoing uptrend. The Relative Strength Index (RSI) has flattened and is currently hovering around the 61 mark, suggesting subdued momentum. Meanwhile, the MACD has formed a negative crossover above the central line, pointing to weakening bullish sentiment in the near term.
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According to O’Neil’s methodology of market direction, Nifty Bank’s status transitioned from an ‘uptrend under pressure’ to a ‘confirmed uptrend’.
Nifty Bank continues to trade sideways, indicating ongoing consolidation at higher levels. Immediate support is placed near the 53,500 mark, which could help limit short-term downside. Looking ahead, the index is expected to remain range-bound between 53,500 and 55,000 in the coming days unless a decisive breakout or breakdown occurs to trigger fresh directional momentum.
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.