Top Stock Recommendations: Nifty Outlook for the Week of February 9-13
According to Sudeep Shah, Head of Technical Research and Derivatives at SBI Securities, investors should keep an eye on Bajaj Finance and Larsen & Toubro as top stock picks for the upcoming week. The stock market has recently experienced significant volatility, particularly with the Nifty index, which faced a wide trading range and fluctuating sentiments. As the market navigates through these challenges, Shah provides insights into the Nifty and Bank Nifty trends, along with recommendations for potential investments.
Nifty Index Performance
The Nifty index has encountered a tumultuous week, marked by extreme volatility. It experienced a staggering 1,662-point range, the largest weekly swing since June 2024. This fluctuation was particularly evident on Union Budget day when the index plummeted to an intraday low of 24,571 due to concerns over an increase in the Securities Transaction Tax on futures and options transactions. However, the market quickly rebounded, surging by 1,770 points after US President Donald Trump announced a reduction in tariffs on Indian goods. This announcement sparked renewed optimism, pushing the index to an intraday high of 26,341.
Despite this initial surge, the Nifty faced aggressive profit-taking, resulting in a sharp 600-point drop shortly after the market opened. This reaction underscored the fragile sentiment among investors, as the index struggled to maintain its upward momentum. As the week progressed, the Nifty entered a phase of sideways consolidation, hindered by significant selling pressure in the IT sector. The Nifty IT index emerged as the worst performer, declining by 6.91% amid rising concerns about the long-term growth prospects of the sector. Technical indicators suggest that the Nifty may continue to trade within a range before making a decisive move.
Bank Nifty Trends
The Bank Nifty index reached a new all-time high of 61,764 on Tuesday, reflecting the ongoing strength in the financial sector. However, the index faced challenges in maintaining these elevated levels, as profit-booking intensified in the latter part of the week. Despite this pullback, the Bank Nifty concluded the week at 60,120, marking nearly a 3% gain. The weekly chart revealed a bullish candle with a long upper shadow, indicating high intraday volatility and persistent selling pressure near the peak levels.
From a trend perspective, the Bank Nifty remains above all key moving averages, reinforcing the medium-term uptrend. However, momentum indicators have begun to flatten, suggesting a period of consolidation as the market digests recent gains. Looking ahead, the 20-day exponential moving average (EMA) zone of 59,600–59,500 is expected to serve as crucial support. Maintaining levels above this zone is essential to uphold the current bullish structure. On the upside, the 60,400–60,500 range is identified as a strong resistance area, with a sustained breakout above 60,500 potentially leading to a rally towards 61,200 and beyond.
Stock Recommendations
Sudeep Shah recommends Bajaj Finance as a strong buy, noting that the stock has recently broken out of the 942–976 consolidation range with increased trading volumes. The Relative Strength Index (RSI) has shown significant improvement, climbing from 32 to 58, indicating a positive momentum shift. The Average Directional Index (ADX) also suggests a strengthening trend direction. Investors are advised to accumulate Bajaj Finance shares in the range of 985-980, with a stop-loss set at 955. The stock is projected to test the 1050 level in the near term.
Similarly, Larsen & Toubro has demonstrated a robust rebound from its 200-day EMA, signaling a potential trend shift. The RSI has recovered sharply from an oversold level of 24 to 59, further indicating bullish momentum. The stock is recommended for accumulation in the range of 4075-4065, with a stop-loss at 3945. Analysts anticipate that Larsen & Toubro could reach the 4355 level shortly, supported by strong price action and sectoral momentum.
(Disclaimer: The stock market recommendations and views expressed are those of the experts and do not necessarily reflect the views of Observer Voice .)
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