Stock recommendations from MarketSmith India

Stock market recap: Indian stocks remained under pressure on Thursday, 12 March, with the benchmark Sensex falling more than 800 points and the NSE’s Nifty 50 slipping below 23,650 as the recent selloff extended into a fourth session.

The 30-share Sensex closed 829 points, or 1.08%, lower at 76,034.42, while the Nifty 50 ended at 23,639, down 228 points, or 0.95%.

Broader markets also declined, though losses were relatively contained. The BSE 150 Midcap index slipped 0.24%, while the BSE 250 Smallcap index fell 0.32%.

The Sensex has now dropped 2,884 points, or 3.65%, over the past four sessions, while the Nifty 50 has lost 811 points, or 3.3%, during the same period, despite a brief 1% rebound on Tuesday.

The selloff has erased about ₹10 trillion of investor wealth, with the market capitalization of BSE-listed firms falling to ₹440 trillion from nearly ₹450 trillion last Friday.

Two stock recommendations for today by MarketSmith India

Buy: Aurobindo Pharma Ltd (current price: ₹1,310)

• Why it’s recommended: Strong presence in the US generics market, diversified product portfolio, focus on specialty and injectables segment, growing biosimilars pipeline, vertical integration benefits, improving Ebitda margins, healthy ANDA approvals, and strong domestic formulations growth.
• Key metrics: P/E: 21.29, 52-week high: ₹1,319.80, volume: ₹276.07 crore
• Technical analysis: Flat base breakout on the daily chart
• Risk factors: US FDA regulatory observations, pricing pressure in US generics, high dependence on US revenues, litigation risks in key markets, currency fluctuation impact, raw material/API cost volatility, delays in product approvals, and intense competition.
• Buy: ₹1,300–1,325
• Target price: ₹1,450 in two to three months
• Stop loss: ₹1,250

Buy: NTPC Ltd (current price: ₹390.90)

• Why it’s recommended: Strong capacity expansion pipeline across thermal, renewable, and green hydrogen projects, Increasing renewable energy portfolio and diversification into new-age energy businesses
• Key metrics: P/E:16.35, 52-week high: ₹392.40, volume: ₹925.00 crore
• Technical analysis: Tight range breakout
• Risk factors: High capital expenditure requirements, regulatory tariff revisions risk, dependence on state DISCOM payments, rising interest rate impact, coal supply & logistics risks, execution delays in new projects, and renewable transition pressure
• Buy at: ₹388–392
• Target price: ₹440 in two to three months
• Stop loss: ₹374

How the Nifty 50 performed on 12 March

Indian equities ended lower on 12 March, extending the recent corrective phase amid broad-based selling across sectors.

Nifty 50 closed at 23,639.15, down 227.7 points or 0.95%, after trading in a range of 23,556–23,833, while Sensex also finished in the red, reflecting weak investor sentiment through the session. Market breadth remained firmly negative, 1,966 stocks declining compared to 1,238 stocks advancing, while 98 remained unchanged. This indicates that selling pressure was widespread and not limited to benchmark heavyweights.

Sector-wise, Auto and FMCG led the losses, falling 3.2% and 1.8%, respectively, while Private Banks and Realty also saw notable profit booking. Financial Services remained under pressure, highlighting caution in rate-sensitive segments. On the other hand, Oil & Gas and Metals managed modest gains, providing limited support to the broader market. Nifty IT was relatively resilient with marginal losses.

Nifty 50 exhibit a clear deterioration in price structure, with the index closing at 23,639.15, marking a decisive breakdown from the recent consolidation band. Price action over the past few sessions reflects strong bearish momentum, characterized by a sequence of lower-highs and lower-lows on the daily chart. Momentum indicators corroborate the weakness. The RSI has declined to 38.4, trending lower and remaining below the neutral 50 mark, suggesting strengthening bearish momentum without yet reaching deeply oversold territory. Meanwhile, the MACD remains in negative territory with a widening gap between the MACD and signal lines, amid expanding negative histogram bars, signaling sustained downside acceleration.

According to O’Neil’s methodology of market direction, the Indian equity market has transitioned to a “Downtrend” from a “Rally Attempt,” indicating an early stage of potential trend stabilization following a period of sustained weakness.

The indx continues to exhibit heightened volatility, reflecting fragile sentiment and elevated uncertainty in the near term. A sustained breach of 23,500–23,200 would materially weaken the current technical structure and could trigger an accelerated downside move toward 23,000 over the short term. Such a breakdown would signal continued distribution and reinforce the prevailing negative bias. On the upside, 24,300-24,600 is expected to act as an immediate hurdle, and only a decisive move above this level would help restore near-term stability and improve the broader risk-reward profile.

How did Nifty Bank perform?

Nifty Bank saw sharp selling pressure and ended the session on a negative note, reflecting continued weakness in the banking space. The index opened at 55,008.20 and initially attempted to stabilise, but selling pressure intensified after the index touched an intraday high of 55,636.95.

Profit booking at higher levels dragged the index sharply lower, pushing it to an intraday low of 54,760.55 before it finally closed at 55,100.95, down 634.80 points (-1.14%) for the session. The broader trend remains weak as the index continues to trade below its key short-term moving averages, indicating that selling pressing currently dominates the market.

Persistent selling in heavyweight banking stocks and cautious investor sentiment ahead of global macro developments have kept the index under pressure. Until the index reclaims key resistance levels, upside attempts are likely to face selling pressure.

From a momentum perspective, technical indicators continue to reflect a bearish undertone. The Relative Strength Index (RSI) is currently placed near 26.7, indicating deeply oversold conditions, which typically suggests that the index may witness intermittent pullbacks or short-covering rallies in the near term. However, oversold reading alone do not guarantee an immediate reversal, especially when the broader trend remains weak.

Meanwhile, the MACD remains firmly in negative territory with a bearish crossover, and the histogram continues to expand on the downside, highlighting persistent downward momentum. The sustained divergence between the MACD line and signal line indicates that selling pressure remains dominant, and momentum continues to favour bears in the near term.

Technically, immediate support for Nifty Bank is placed in 54,300–54,000, followed by 53,000. A decisive breach below these levels could trigger further downside pressure in the index.

On the upside, resistance is seen near 56,000–56,500, with a stronger supply zone placed around 57,500, where the index has previously encountered selling pressure. Given the current weak technical structure and heightened market volatility driven by global factors such as elevated crude oil prices and ongoing geopolitical tensions, the index may continue to remain under pressure in the near term. Nevertheless, a short-covering bounce cannot be ruled out, particularly if deeply oversold conditions attract tactical buying near key support levels.

MarketSmith India 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.

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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.