Best stock recommendations today: MarketSmith India's top picks for 28 July

Market sentiment remained weak throughout the session, with the index failing to hold above its key support levels. IT stocks were the major laggards, reflecting concerns over global demand and margin pressures, while midcaps saw broad-based profit booking. On the other hand, certain PSU Banks and Pharma names showed relative strength, offering some cushion to the broader market.

Two stock recommendations for today by MarketSmith India:

Buy: Cipla Ltd. (current price: ₹1,532)

• Why it’s recommended: Strong presence in chronic and acute therapy segments, robust U.S. and Indian business with healthy margin profile, steady R&D investments in complex generics and respiratory products
• Key metrics: P/E: 22.71, 52-week high: ₹ 1,702.05, volume: ₹ 753.64 crore
• Technical analysis: Reclaimed its 200-DMA on above average volume
• Risk factors: Regulatory and compliance risk, pricing pressure in the U.S. generics market, dependency on select products and geographies
• Buy: ₹ 1,533
• Target price: ₹1,690 in two to three months
• Stop loss: ₹ 1,450

Also Read: India-UK FTA to boost bilateral trade for pharma, medtech, say industry bodies

Buy: United Breweries Limited (current price: ₹2,030)

• Why it’s recommended: Premiumization and volume expansion, capacity expansion and supply chain investments, large addressable market and low per capita consumption
• Key metrics: P/E: 114.51, 52-week high: ₹ 2,300, volume: ₹ 48.98 crore
• Technical analysis: 200-DMA bounce
• Risk factors: Regulatory and state-market risks, input cost pressure and packaging constraints
• Buy at: ₹ 2,030
• Target price: ₹ 2,290 in two to three months
• Stop loss: ₹ 1,910

Also Read: SRF pushes the pedal on capex amid potential demand revival

Nifty 50 Recap

On Friday, Indian equity markets witnessed a sharp sell-off as sustained bearish sentiment drove benchmark indices lower. Nifty 50 declined 225.10 points or 0.90% to close at 24,837, marking its lowest level in a month. Market breadth was distinctly negative, with 2,654 stocks declining versus 826 advancing, and 107 remaining unchanged, highlighting widespread weakness across the board.

Significant pressure was observed in key financial names, with Bajaj Finance and Bajaj Finserv leading the losses, alongside notable weakness in frontline banking counters. Barring Pharma and Health Care, sectoral performance remained broadly negative, offering marginal support.  Nifty Media led sectoral declines, slipping more than 2.5%, while IT, Metal, Auto, PSU Bank, and Realty indices registered losses more than 1% each.

Broader market indices mirrored the weakness in large caps, with Nifty Midcap and Smallcap indices correcting up to 2%, indicating broad-based profit-booking and heightened risk aversion. The India VIX surged more than 5%, reflecting elevated volatility and increased investor caution amid ongoing earnings-related concerns and macroeconomic uncertainties.

From a technical perspective, Nifty 50 formed two consecutive bearish candles on the daily chart and has breached its 50-DMA, signaling a loss of short-term support. The relative strength index (RSI) continues to trend downward and is currently positioned around 41, indicating waning bullish momentum. Furthermore, the MACD has triggered a negative crossover, reinforcing the cautious near-term outlook. These technical indicators collectively point to the possibility of continued consolidation or further downside pressure in the sessions ahead.

According to O'Neil’s methodology of market direction, the market status has been downgraded to an "Uptrend Under Pressure" as Nifty breached its "50-DMA" and the "distribution day count" rose to five. 

Nifty 50 continued to trend with a negative bias on Friday, closing below 24,800 amid broad-based selling pressure. Going forward, 24,750–24,500 will be a critical support area to watch; a sustained breach below this range could signal further downside in the near term. On the upside, immediate resistance is seen near 25,300. A decisive breakout and sustained move above this level would be essential to restore bullish momentum and improve market sentiment in the days ahead.

How did Nifty Bank Perform?

On Friday, Bank Nifty opened on a positive note, but volatility soon set in, dragging the index into negative territory as the session progressed. It remained under pressure for most of the day, reflecting persistent selling interest. On the daily chart, Bank Nifty formed a second consecutive bearish candle, with a lower-high lower-low structure, indicating continued weakness. The index opened at 57,170.70, touched an intraday high of 57,170.70, a low of 56,439.40, and finally settled at 56,528.90.

The relative strength index (RSI) has turned marginally lower and is currently placed at 48, suggesting weakening momentum. Meanwhile, the MACD remains above the central line but continues to display a negative crossover, reflecting underlying caution. This technical configuration presents a neutral to mildly bearish outlook in the near term.

According to O’Neil’s methodology of market direction model, Bank Nifty remains in a 'Confirmed Uptrend’, a status it has successfully maintained over the past few weeks.

Nifty Bank has been consolidating within a defined range of 57,500 to 56,000 over the past three weeks, indicating market indecision and the absence of a strong directional bias. A decisive move beyond either boundary, a breakout above 57,500 or a breakdown below 56,000, is likely to set the stage for the next significant trend. Until such a move materializes, the sideways consolidation is expected to persist. Technically, immediate resistance is aligned near 57,500, while critical support is positioned between 56,200 and 56,000.

MarketSmithIndia 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.

Trade name: William O’Neil India Pvt. Ltd.

Sebi Registration No.: INH000015543

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.