Stock recommendations for 4 December from MarketSmith India

Nifty 50 closed 108.10 points (-0.42%) lower, settling at 25,924.10, while Sensex shed 308.91 points (-0.35%), finishing at 84,841.73. Selling pressure was pervasive across the broader market, evidenced by a weak advance-decline ratio of approximately 1:3 across the BSE 500 stocks, indicating a significant tilt towards declines.

From a sectoral perspective, banking and financial services, especially PSU Bank index (-3.20%), was the hardest hit. On the other hand, Nifty IT (+0.76%) emerged as a resilient outlier, supported by a weakening rupee. Macro focus was dominated by the start of the RBI's three-day Monetary Policy Committee (MPC) meeting, with investors awaiting clarity on interest rate action following recent strong GDP data and low inflation prints.

Two stock recommendations by MarketSmith India for 4 December

Buy: Birlasoft Ltd (current price: ₹2,954)

• Why it’s recommended: Strong client base in BFSI, manufacturing & life sciences, consistent revenue growth in digital transformation services, increasing deal wins and healthy order book, improving operating margins over recent years, focus on cloud, data, AI, and next-gen tech capabilities, and growing presence in the US and Europe markets
• Key metrics: P/E: 23.85, 52-week high: ₹624.35, volume: ₹370.88 crore
• Technical analysis: Reclaim its 200-DMA on above average volume
• Risk factors: High revenue dependence on select large clients, intense competition from larger it players, margin pressure due to wage hikes & talent costs, currency fluctuation risks (USD/INR exposure), slower globality spending or recessionary trends, high attrition common in it services industry, project delay/cancellation risks affecting visibility, valuation risks if stock trades at premium multiples
• Buy at: ₹410–425
• Target price: ₹480 in two to three months
• Stop loss: ₹395

Buy: Privi Speciality Chemicals Ltd (current price: ₹3,256)

• Why it’s recommended: Leading global position in aroma/fragrance chemicals, broad and diversified product portfolio
• Key metrics: 58.68; 52-week high: ₹3,440; volume: ₹35.06 crore
• Technical analysis: pullback setup
• Risk factors: Exposure to fluctuations in raw material costs and global commodity cycles, competition (domestic and international) & market demand variability
• Buy at: ₹3,230–3,290
• Target price: ₹3,800 in two to three months
• Stop loss: ₹ 3,000

How the Nifty 50 performed on 3 December

Indian equities ended lower on 3 December, with the Nifty 50 slipping 46 points (-0.18%) to close at 25,986, retreating from the day’s high near 26,175 as profit-booking dominated afternoon trade.

Broader market sentiment remained weak, reflected in a soft advance–decline ratio, with 1,052 stocks advancing against 2,074 declining, signalling broad-based pressure outside the headline indices.

On the sectoral front, Nifty Auto, FMCG, PSU Banks, Consumer Durables, and Oil & Gas was the major decliners, with losses ranging from 0.6–3%. Defensive pockets offered little support, though IT (+0.76%) and Private Banks (+0.57%) provided modest resilience. Market action suggested caution ahead of key global data releases and lingering uncertainty around crude price volatility.

Price action shows the index pulling back from the higher trendline for a second consecutive session, signalling waning momentum after a strong multi-week climb.

Over the past few sessions, the candles indicate supply emerging at elevated levels, while the index is still holding above the lower rising trendline, preserving the broader upward structure for now. The RSI has moved past 60–65 and is trending lower, indicating a loss of strength and a shift toward neutral momentum after previously attempting to remain in bullish territory.

This softening aligns with the price rejection seen at the upper wedge boundary. Meanwhile, the MACD continues to show a flattening profile with a narrowing histogram, reflecting a slowdown in upside momentum and a potential early-stage bearish crossover setup if weakness persists.

According to O'Neil’s methodology of market direction, the market status has shifted to a "Confirmed Uptrend" as it decisively surpassed its previous rally high of 25,670 to register a new 52-week.

The index successfully retested its 21-DMA and closed above it, reaffirming short-term resilience. On the downside, immediate support is situated at 25,850, while 25,700 remains a critical demand area for sustaining the broader uptrend and maintaining overall market stability. On the upside, a decisive close above 26,300 would strengthen the technical structure and open room for a continuation of the rally toward 26,500–26,700 in the near term.

How did Nifty Bank perform?

Nifty Bank opened on a negative note and moved in a volatile range throughout the session. However, strong buying interest emerged in the last hour, lifting the index into positive territory. It ultimately closed in the green, forming a bullish candle on the daily chart, indicating renewed momentum.

The index opened at 59,158.70, touched an intraday high of 59,414.90, and tested a low of 58,925.70 before settling at 59,348.25. The late recovery suggests improving sentiment, and sustained follow-through could strengthen the short-term trend. Traders may monitor key support and resistance levels for directional cues.

The RSI is trending in the bullish zone and is currently positioned at 63, indicating strengthening momentum. Meanwhile, the MACD reflects a negative crossover, although it remains above the central line, suggesting underlying support despite short-term hesitation. According to the O’Neil methodology of market direction, Nifty Bank remains in a Confirmed Uptrend. This alignment of indicators highlights a broadly constructive market environment, warranting close monitoring for potential breakout in the stocks from the banking space.

The index ended the session on a positive note and continued to trade comfortably above all key moving averages on the daily chart, reaffirming its strong bullish momentum with no visible signs of weakness. After briefly registering a new all-time high of 60,114, Nifty Bank experienced mild profit-booking.

In the near term, 58,500–58,400 is likely to serve as a robust support area, where any pullback may attract fresh buying. On the upside, 60,114 remains a crucial resistance level. A sustained move above 60,000 would reinforce the prevailing bullish structure and potentially trigger the next upward leg.

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.