Key Stocks to Consider This Week: Analyzing the Nifty Outlook
According to Sudeep Shah, Head of Technical Research and Derivatives at SBI Securities, Dalmia Bharat and Godrej Properties Ltd are the top stock picks for the week starting July 21, 2025. The stock market has shown a bearish trend, with the Nifty index declining for three consecutive weeks. Shah’s insights also highlight the importance of upcoming earnings reports from major companies, which could influence market direction.
Nifty Index Analysis
The Nifty index has faced a challenging week, closing lower for the third week in a row. This trend reflects a persistent bearish sentiment among investors. On the weekly chart, the index has formed a bearish candle characterized by lower highs and lower lows, indicating a continuation of downward momentum. Throughout the past week, the Nifty made three attempts to break above its 20-day Exponential Moving Average (EMA) but was met with resistance each time. Currently, it is trading significantly below this EMA, which is now trending downward, further emphasizing the bearish outlook.
Moreover, the flattening of the 50-day and 100-day EMAs suggests a potential loss of medium-term momentum. This change indicates indecisiveness among investors and a weakening bullish strength. The daily Relative Strength Index (RSI) is currently at 43, marking its lowest point since April 2025. The RSI is also trading below its 9-day average, reinforcing the bearish setup. The upcoming trading session on Monday is crucial, as major companies like Reliance Industries, HDFC Bank, and ICICI Bank will announce their quarterly results. The market’s reaction to these earnings could either strengthen the current trend or trigger a reversal.
Bank Nifty Performance
The Bank Nifty index has also extended its losing streak, closing lower for the third consecutive week. On the daily chart, it has broken down from a Rising Wedge pattern and has fallen below its 20-day EMA, signaling increasing bearish pressure. A significant observation is the behavior of the daily RSI. Despite a brief mid-week recovery, the RSI failed to surpass the 60 level, which is considered a bearish indicator. Currently, the RSI stands at 45, its lowest since March 2025, reflecting a notable loss of momentum and increasing weakness in the trend.
Looking ahead, the 50-day EMA zone between 55,950 and 55,850 will serve as immediate support for the Bank Nifty. If the index drops below the 55,850 level, the next critical support level is at 55,300. Conversely, the 20-day EMA zone between 56,700 and 56,800 will act as a significant hurdle for the index in the near term.
Stock Recommendations
Sudeep Shah recommends Dalmia Bharat and Godrej Properties Ltd as top stock picks for investors. Dalmia Bharat has recently experienced a consolidation breakout accompanied by strong trading volume. All moving averages and momentum indicators suggest a bullish trend for the stock. Investors are advised to accumulate shares in the range of 2,260 to 2,240, with a stop-loss set at 2,170. The stock is expected to test the 2,400 level in the short term.
Godrej Properties Ltd has shown resilience, taking support near the 2,192 level before rebounding sharply with increased volume. The stock is currently trading above both its short-term and long-term moving averages. The daily RSI is on the verge of crossing the 60 mark, indicating positive momentum. Investors are encouraged to accumulate shares in the range of 2,370 to 2,350, with a stop-loss at 2,280. The stock is projected to reach the 2,500 level shortly.
(Disclaimer: The recommendations and views on the stock market provided by experts are their own and do not represent the views of Observer Voice.)
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