Raja Venkatraman recommends three stocks for 25 May

The Sensex rose 231.99 points, or 0.31%, to close at 75,415.35, while the Nifty gained 64.60 points, or 0.27%, to settle at 23,719.30. Market breadth was slightly positive, with 2,026 shares advancing against 1,827 declines, signalling a modest tilt toward buyers.

Sector-wise, Nifty Bank outperformed, rising more than 1% on sustained buying in private lenders. In contrast, Nifty Pharma and Healthcare indices were the biggest laggards, reflecting sector-specific weakness.

Broader markets showed a mixed trend: midcaps ended marginally higher, while smallcaps slipped into negative territory. Overall, the session underscored selective strength in banking and consumption themes, which helped offset pressure from healthcare stocks and kept benchmarks in positive territory despite uneven sectoral performance.

Outlook for trading

Markets have managed to hold firm, with the recent rebound extending a sense of stability, even as the Nifty continues to test the 23,200–23,200-plus support zone. Unlike last week, broader indices have shown relatively better participation, though conviction remains limited.

While a revival is visible, the market is still not out of the woods, and the current move may well be an intermittent rally. Near-term triggers are likely to be a mix of domestic cues and geopolitical developments, including uncertainty around US–Iran talks, which could weigh on sentiment.

With markets closed on Thursday, volatility is expected to persist in the coming sessions before conditions stabilise.

Midcaps, too, are showing signs of recovery, with high-beta stocks witnessing renewed buying interest and forming a higher low — an early indication of upside potential in the near term. The RSI suggests improving momentum, pointing to a possible extension of the rebound after recent volatile sessions.

However, higher timeframes remain tentative, making a discretionary approach more appropriate as conditions are still not conducive to momentum-led positioning. As long as the 23,200 level holds, dips may continue to attract buying interest, with a potential upside target of 24,200 in the coming week.

While the overall trend remains positive, market participation continues to be listless, warranting closer attention to how prices evolve in the near term. The current environment still favours short-term participants, helping sustain the prevailing trend, but conviction in broader investing remains limited.

In such conditions, trading discipline and clarity of purpose become more important, as directionless participation can quickly erode gains. While previously identified support and resistance levels remain relevant points of reference, the market is increasingly entering a phase where valuations are beginning to shape perception more prominently.

As always, markets tend to move in ways that defy consensus expectations, underscoring the need for caution even within a broadly supportive trend.

Three stocks to trade, recommended by NeoTrader’s Raja Venkatraman:

SFL (current market price ₹638.50)

• Why it’s recommended:Sheela Foam Ltd is India's leading manufacturer of polyurethane (PU) foam and mattresses, primarily known for its flagship brand, Sleepwell. The stock has been in a decline since last 6 months and the last few days has seen a V-shaped recovery with a formation of a higher high higher low fuelled by strong Q4 numbers has led to a strong possibility of upside. As we can see that the momentum has picked up and the upward traction is possible now. With the midcap index doing well we could look to go long.
• Key metrics:
  • P/E: 75.41,
  • 52-week high: ₹98,
  • Volume: 8.1M
• Technical analysis: Support at ₹590, resistance at ₹750.
• Risk factors: Fluctuating raw material costs, intense domestic competition, high valuation metrics relative to peers, and the integration complexities of recent large-scale acquisition.
• Buy : above ₹641.
• Stop loss: ₹608.
• Target price: ₹710 (2 Months)

MFSL (current market price ₹1,680)

• Why it’s recommended:Max Financial Services Ltd (MFSL) is a prominent Indian holding company under the $5 billion Max Group, primarily focused on the life insurance sector. After the sharp sell off since its February highs , the prices seemed to be on the pathway to recovery and have encountered strong supports at the Kijun Sen and the revival has led to a strong breakout. The Relative Strength Index is heading to cross 60 levels , indicating some potential to the upside, one can consider going long.
• Key metrics:
  • P/E: 9823.39,
  • 52-week high: ₹1891.35,
  • Volume: 1.11M.
• Technical analysis: Support at ₹1025, resistance at ₹1250.
• Risk factors: High geographic and borrower concentration, reliance on indirect lending, and exposure to unsecured and riskier asset classes.
• Buy : above ₹1680
• Stop loss: ₹1620
• Target price: ₹1825 (2 Months)

POLYMED (current market price ₹1,598.20)

• Why it’s recommended: Poly Medicure Ltd (POLYMED) is a leading Indian medical device company. Founded in 1995, it specializes in the manufacturing and export of high-quality disposable medical devices. The stock has declining for a last 9 months and the prices have now shown signs of bottoming out. With a strong breakout on Daily charts above the cloud we can now look to invest for the short term as momentum is seen picking up. The steady rise in the Relative Strength Index after stabilising at the neutral zone suggests that we could be looking at some upside.
• Key metrics:
  • P/E Ratio: 47.36
  • 52-week high: ₹2447.50
  • Volume: 120.61K
• Technical analysis: Support at ₹1605, resistance at ₹1950.
• Risk factors: high dependence on single-use core products, severe margin sensitivity to crude-oil driven raw material costs, and heavy exposure to highly-regulated, fiercely competitive export markets.
• Buy : above ₹1605
• Stop loss: ₹1525.
• Target price: ₹1760.

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.