Recommended Stocks to Consider This Week Amid Nifty’s Downside Momentum
The stock market is currently experiencing a period of uncertainty, with the Nifty index showing signs of weakness after a week of indecisive trading. Sudeep Shah, Head of Technical Research and Derivatives at SBI Securities, has identified EID Parry and Prestige as top stock picks for investors this week. His analysis highlights the importance of a cautious approach amid macroeconomic concerns and earnings season, suggesting that investors should focus on specific stocks rather than broader market trends.
Nifty Index Analysis
The Nifty index has faced challenges recently, spending the first four trading sessions of last week within a narrow 200-point range. However, a significant shift occurred on Friday when the index opened sharply lower, breaking below its consolidation zone. This movement indicates a growing bearish sentiment among investors. The Nifty has now fallen below its crucial 20-day exponential moving average (EMA), which has started to slope downward, signaling potential weakness.
Technical indicators further support this bearish outlook. The daily Relative Strength Index (RSI) has crossed into negative territory, while the Moving Average Convergence Divergence (MACD) histogram has also turned negative. Immediate support for the index is now seen in the 24,900 to 24,850 range, with a break below this level potentially leading to further declines toward 24,550. Conversely, a rally above the 25,300 to 25,350 zone is necessary for bulls to regain control in the short term. Amid these technical challenges, uncertainties surrounding macroeconomic factors and corporate earnings are adding to investor anxiety.
Bank Nifty Performance
The Bank Nifty index has also shown limited movement, trading within a narrow band of just 756 points, marking its tightest weekly range since August 2024. This lack of volatility reflects indecision among market participants and a lack of strong directional cues from the banking sector. The weekly chart reveals a small-bodied bearish candle with a long upper shadow, indicating emerging selling pressure at higher levels.
Currently, the Bank Nifty is hovering around its 20-day EMA, suggesting that it is at a critical juncture. The daily RSI remains in a sideways range, indicating ongoing consolidation without strong momentum. Looking ahead, the immediate support zone for the Bank Nifty is between 56,200 and 56,300, while resistance is expected around 57,100 to 57,200. A decisive breakout in either direction could lead to a more pronounced trend in the index.
Stock Recommendations: EID Parry
EID Parry has emerged as a strong stock pick, having recently broken out of its consolidation phase on the daily chart. This breakout is notable for its accompanying surge in trading volume, which adds credibility to the upward movement. The stock has consistently outperformed major indices in recent sessions, indicating growing investor interest. Currently trading at an all-time high, EID Parry shows strong bullish momentum across all moving averages and technical setups.
Investors are advised to accumulate EID Parry shares in the range of 1,155 to 1,145, with a stop loss set at 1,100. The stock is projected to test the target price of 1,280 in the short term, representing a potential return of approximately 11% over the next three months.
Stock Recommendations: Prestige
Prestige has also been highlighted as a promising investment opportunity. After reaching a swing high of 1,761 on June 24, the stock entered a brief pullback phase characterized by low trading volumes, which is typically a sign of healthy profit-taking rather than a trend reversal. The correction found support near the 34-day EMA, and the stock has since resumed its upward trajectory, supported by a noticeable increase in trading volume.
Recent performance indicates that Prestige is regaining strength and showing relative leadership compared to major indices. Positive momentum indicators, including a bullish daily RSI, suggest that the stock is poised for further gains. Investors are encouraged to accumulate shares in the range of 1,700 to 1,690, with a stop loss at 1,620. The stock is expected to reach a target price of 1,900 in the near term, offering a potential return of around 12% over the next three months.
Disclaimer: The opinions, analyses, and recommendations expressed on this website are those of the contributors or sources cited and do not necessarily reflect the views of Observervoice. Always consult with a qualified investment advisor or financial planner before making any investment decisions.
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