Stock market recap: Stock market benchmarks, the Sensex and the Nifty 50, ended lower on Monday, 20 July, tracking weak global cues amid escalating US-Iran tensions.
The Sensex declined 443 points, or 0.57%, to close at 77,708.52, while the Nifty 50 shed 96 points, or 0.39%, to settle at 24,238.50.
However, the mid and small-cap segments remained resilient. The Nifty Midcap 100 index climbed 0.60%, while the Smallcap 100 index rose by 0.16%.
Two stock recommendations by MarketSmith India:
Buy: KPI Green Energy Ltd (current price: ₹412)
- Why it’s recommended: Strong renewable energy portfolio, beneficiary of clean energy transition, growing solar power capacity, captive and IPP business model, strong order book visibility, government support for renewables, beneficiary of green energy policies, capacity expansion opportunities, strong execution capabilities, rising demand for captive power, long-term power purchase agreements, improving operational efficiencies, growth in C&I solar demand, diversified renewable projects, and long-term industry tailwinds.
- Key metrics: P/E: 15.96, 52-week high: ₹558.40, volume: ₹29.43 crore
- Technical analysis: Trendline Breakout
- Risk factors: Dependence on government policies, project execution delays, high capital expenditure requirements, regulatory and tariff risks, interest rate and refinancing risks, weather-related generation risk, working capital intensive business, counterparty payment delays, competition in renewable sector, dependence on equipment supply, margin pressure from rising costs, grid connectivity challenges, technology obsolescence risk, valuation risk after sharp re-rating, and earnings volatility from project timing.
- Buy: ₹408–414
- Target price: ₹455 in two to three months
- Stop loss: ₹390
Buy: Shyam Metalics and Energy Ltd (current price: ₹1,055)
- Why it’s recommended: Integrated metals manufacturing business, diversified steel and ferro alloys portfolio, captive power generation, cost-efficient operations, strong operating margins, capacity expansion opportunities, beneficiary of infrastructure growth, growing value-added product mix, strong cash flow generation, healthy balance sheet, beneficiary of rising steel demand, backward integration advantage, export growth opportunities, improving return ratios, and attractive dividend track record.
- Key metrics: P/E: 26.92, 52-week high: ₹1,090.00, volume: ₹281.77 crore
- Technical analysis: Flat base breakout
- Risk factors: Steel price volatility, raw material cost fluctuations, cyclical metals industry demand, power and energy cost risks, margin pressure during commodity downturns, dependence on infrastructure spending, environmental compliance risks, export demand fluctuations, working capital intensive business, capacity expansion execution risk, regulatory and mining policy risks, competition in steel sector, economic slowdown affecting demand, earnings volatility from commodity cycles, and valuation risk during metal downturns.
- Buy at: ₹1,044–1,060
- Target price: ₹1,190 in two to three months
- Stop loss: ₹990
Nifty 50 performance on 17 July
Nifty 50 opened on a negative note at 24,190.05 and initially witnessed selling pressure. After touching an intraday high of 24,266.10, the index failed to sustain gains as profit-booking emerged during the session. It subsequently slipped to an intraday low of 24,135.85 before settling at 24,238.50, down 95.80 points (-0.39%).
Despite the weak close, the index managed to hold above its 10-, 21-, 50-, and 100-DMA, indicating that the broader intermediate-term trend remains constructive. The formation of a relatively small bearish candlestick near recent highs reflects consolidation rather than aggressive distribution. Market participants continue to monitor earnings announcements and global cues, while sustained buying in heavyweight sectors is likely to determine the index's next directional move.
From a technical perspective, the RSI (14) is placed at 55.58, comfortably above the neutral 50 mark, suggesting that bullish momentum remains intact despite the day's decline. However, the RSI has flattened slightly, indicating a temporary pause in upward momentum rather than a reversal. The MACD remains above the zero line, reflecting a positive broader trend. Although the histogram has turned marginally negative and the MACD line is hovering near a bearish crossover, signalling weakening short-term momentum. If the RSI sustains above 50 and the MACD stays above the zero axis, the ongoing consolidation is likely to remain within a constructive medium-term uptrend rather than evolve into a meaningful corrective phase.
Technically, 24,100–24,140 represents the immediate support zone, coinciding with the 10- and 21-DMA, followed by stronger support near 23,925 (100-DMA) and 23,830 (50-DMA). On the upside, immediate resistance is placed around 24,300–24,350, while a decisive breakout above 24,500 could pave the way for a move toward 24,700–24,800 in the near term.
From a macro perspective, investors are closely tracking the ongoing Q1FY27 earnings season, foreign institutional investor activity, crude oil prices and global central bank commentary. A positive earnings surprise from index heavyweights could provide the catalyst for an upside breakout. In contrast, sustained global risk aversion or weaker-than-expected corporate results may keep Nifty confined to a consolidation phase before its next meaningful directional move.
How did Nifty Bank perform?
Nifty Bank opened on a negative note at 57,738.25 and witnessed selling pressure right from the opening bell. After touching an intraday high of 58,111.00, the index failed to sustain gains as profit-booking intensified, dragging it to an intraday low of 57,533.10. Eventually, it eventually at 57,945.00, down 576.40 points (-0.98%) for the day.
Technically, the index is trending above all its key moving averages, indicating that the broader trend remains positive despite the short-term weakness. The formation of a bearish candle after a recent pullback reflects consolidation near the resistance zone rather than a decisive trend reversal. Banking stocks may continue to witness stock-specific action as investors closely monitor Q1 FY27 earnings and institutional fund flows.
The RSI (14) is placed at 54.92, remaining above the neutral 50 mark, which suggests that bullish momentum is moderating but has not turned negative. However, the RSI has softened over the past few sessions, indicating a temporary loss of buying strength. Meanwhile, the MACD continues to trade above the zero line, reflecting a positive medium-term trend, although a negative crossover along with a weakening histogram point to fading short-term momentum. If the RSI sustains above 50 and the index continues to trade above its key moving averages, the ongoing consolidation is likely to remain healthy within the prevailing uptrend rather than signalling a major corrective phase.
On the technical front, immediate support is placed around 57,360 (200-DMA). Stronger support is seen near 56,060 (50-DMA) and 56,010 (100-DMA). On the upside, immediate resistance is positioned near 58,100, while a decisive breakout above this level could open the door for a move toward 58,500–59,000 over the coming sessions.
From a broader perspective, investors will closely track the ongoing Q1FY27 earnings season, particularly results from major private and PSU Banks, along with FII activity and global market sentiment. Sustained improvement in banking earnings and stable liquidity conditions could help the index resume its upward trajectory. In contrast, failure to hold above the 10 DMA may trigger short-term consolidation before the next directional move.
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.
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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.