Key support levels were put to the test on Wednesday as bullish enthusiasm hit a wall of hesitation, failing to break out and extend gains. Even so, the market's underlying resilience continues to anchor investor confidence.
Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman:
AARTIIND (current price: ₹530.90)
Buy above ₹533, stop ₹503 target ₹590 (Multiday)
- Why it’s recommended: Aarti Industries Limited is a leading global manufacturer of specialty chemicals and pharmaceutical intermediates, specializing in benzene- and toluene-based derivatives. Following a wave of profit-booking in May 2026, the stock staged a swift V-shaped recovery following its Q4 earnings. A subsequent period of range-bound consolidation pointed to strong institutional accumulation, setting the stage for a potential Q1 earnings-led breakout. Technically, the stock has cleared its Value Area Resistance at ₹510 on a strong volume spike, triggering fresh buying interest. With the Relative Strength Index (RSI) holding comfortably above 60, momentum is firmly in favor of the bulls, paving the way for further upside in the coming weeks. Go Long.
- Key metrics:
- P/E Ratio : 36.81
- 52-week high: ₹522.90
- Volume: 1.54M
- Technical analysis: Support at ₹480, resistance at ₹650
- Risk factors: Product concentration, geopolitical disruption and working capital & receivables management.
- Buy: above ₹533.
- Stop loss: ₹503.
- Target price: ₹590 (2 Months)
BHEL (current price: ₹420)
Buy above ₹420, stop ₹397, target ₹468 (Multiday)
- Why it’s recommended: As India’s largest state-owned engineering and manufacturing enterprise in the energy and infrastructure space, BHEL is showing renewed technical momentum. Following a sharp rally in May 2026, the stock entered a broad consolidation phase, holding onto its gains despite intermittent profit-booking. After forming a resilient double bottom at ₹375, a steady recovery has drawn fresh buying interest. Crucially, a volatility squeeze breakout backed by steady volumes indicates that consistent operational improvements over recent quarters are now reflecting on the charts. With technical indicators signaling a trend revival, the stock offers a compelling setup. Consider going long.
- Key metrics:
- P/E: 163.04
- 52-week high: ₹2186.80
- Volume: 14.61M
- Technical analysis: Support at ₹380, resistance at ₹450
- Risk factors: High working capital intensity due to long-gestation power projects, heavy revenue dependence on the cyclical thermal power sector.
- Buy: above ₹420
- Stop loss: ₹397
- Target price: ₹468 (2 Months)
UNIONBANK (current price: ₹187)
Buy above ₹190, stop ₹183, target ₹206 (Multiday)
- Why it’s recommended: As one of India’s premier public sector lenders with a strong footprint across retail, corporate, and wholesale banking, Union Bank of India presents a compelling trading opportunity. Following a period of heightened volatility and sharp profit-booking, the stock has staged an impressive V-shaped recovery. Strong Q1 earnings are now acting as a fundamental catalyst, driving a steady volume expansion. Concurrently, a rising Relative Strength Index (RSI) confirms that bullish momentum remains intact. A decisive breakout above the key resistance level of ₹175 serves as the primary trigger for a fresh leg higher.
- Key metrics:
- P/E Ratio: 7.16
- 52-week high: ₹205.45
- Volume: 22.01M
- Technical analysis: Support at ₹175, resistance at ₹210
- Risk factors: Declining Net Interest Margins (NIMs), a lagging low-cost deposit ratio, and normalizing asset quality signals.
- Buy: above ₹190
- Stop loss: ₹183
- Target price: ₹206
Stock market update
Indian equities ended on a cautious note on 12 August as choppy trade kept the Nifty under pressure. After dropping early to test the crucial 24,300 support zone, the index staged a modest recovery to close near 24,471. Broader market breadth was more resilient, with midcaps holding firm and smallcaps making gains. Financials weighed heavily on the headline index, though steady buying in select IT and pharma stocks provided crucial support.
Among individual movers, Tata Consumer, UltraTech Cement, Apollo Hospitals, and Nestle led the losses, while Dr Reddy’s, TCS, Titan, and Infosys ended in the green. Sectorally, Pharma surged 1% and IT gained 0.6%, contrasting with 1% declines in Realty, FMCG, and Metals. Technical setup indicates the Nifty is consolidating after six sessions of range-bound movement, with analysts viewing the 24,300 level as a potential higher bottom that could trigger a rebound once market volatility cools.
Outlook for trading
Despite a sharp rebound to start the week on a positive note, an air of caution lingers. Concerns surrounding potential changes to the Securities Transaction Tax (STT) briefly tested sentiment, but the market quickly regained momentum as traders repositioned for medium-term growth. While risks like global monetary shifts and corporate earnings alignment remain, the recent market action signals a decisive bullish turn, bolstering optimism for Indian equities.
On the global front, updates surrounding the US-Iran situation keep traders guessing, though emerging positive macro indicators have helped spark broader market momentum. With Foreign Institutional Investors (FIIs) dialing back aggressive selling, short covering could further fuel a market recovery as traders unwind bearish bets.
Derivatives data reinforces this bullish shift. Substantial Put writing at the 24,300 strike indicates a firming market floor, leaving room for upside as geopolitical and policy clarity emerges.
Key support defined around the 20-period EMA and the 38.2% Fibonacci retracement level has held up well, setting the stage for a positive close heading into August expiry. The 24,300 mark continues to act as a crucial anchor, further bolstered by a classic hammer candlestick pattern at support. However, with the RSI remaining somewhat subdued and heavy short positioning still in the system, a period of range-bound consolidation between 24,300 and 24,800 remains likely in the near term.
Raja Venkatraman is co-founder, NeoTrader. His Sebi-registered research analyst registration no. is INH000016223.
Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by Sebi and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors.
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.