Stock recommendations for 25 November from MarketSmith India

Nifty 50 closed 109 points (-0.42%) lower at 25,959.50, decisively failing to sustain above the key psychological mark of 26,000, while Sensex shed 331 points (-0.39%) to settle at 84,900.71.

On the sectoral front, IT index showed resilience and led the gains, while metals, realty, and auto sectors faced significant selling pressure. The broader market sentiment was weak, with the overall advance-decline ratio on the NSE tilting in favour of declines, indicating a cautious approach to smaller-cap stocks.

Macroeconomically, the market reacted to continued FII selling, though DII support and a slight rebound in the Indian rupee from its all-time low provided some cushion.

Two stock recommendations by MarketSmith India:

Buy: Eicher Motors Ltd. (current price: ₹1,180)

• Why it’s recommended: Strong brand presence in the premium motorcycle segment (Royal Enfield), consistent revenue growth and solid operating margins, healthy balance sheet with low debt and strong cash reserves, expanding global footprint and export potential, continued new model launches driving product diversification, and efficient management and high return ratios (ROE/ROCE).
• Key metrics: P/E: 47.09, 52-week high: ₹7284.50, volume: ₹767.59 crore
• Technical analysis: Flat base pattern breakout on above average volume
• Risk factors: High dependence on Royal Enfield for revenue concentration, rising competition in the mid-size motorcycle segment, vulnerability to raw material price fluctuations, regulatory risks related to emission norms and EV transition, slower rural demand recovery impacting volume growth, currency volatility affecting export margins, and potential margin pressure from increased R&D and EV investments.
• Buy: ₹6,200–7,330
• Target price: ₹7,990 in two to three months
• Stop loss: ₹6,900

Buy: NBCC (India) Ltd (current price: ₹116)

• Why it’s recommended: Strong order book backed by a robust project pipeline, and asset monetization projects
• Key metrics: 46.29; 52-week high: ₹131; volume: ₹604.47 crore
• Technical analysis: trendline breakout retest
• Risk factors: Execution delays, dependence on government contracts
• Buy at: ₹115–116.50
• Target price: ₹125 in two to three months
• Stop loss: ₹ 111.90

Nifty 50 Recap

Indian equities extended their losing streak on Monday, with benchmark indices closing lower amid weak global cues and profit-booking in heavyweight stocks.

Nifty 50 slipped 108.65 points, or 0.42%, to end at 25,959.50, while Sensex lost around 390 points to settle near 85,250. Markets remained range-bound through most of the session but witnessed a sharp sell-off in the final hour, as concerns over persistent foreign fund outflows and elevated U.S. bond yields weighed on sentiment. On the sectoral front, Nifty IT (+0.4%) was the sole gainer. Meanwhile, FMCG, Metals, Consumer Durables, and Financials led the decline, each shedding between 0.6% and 1.2%. The broader market underperformed, with the advance-decline ratio heavily skewed in favor of bears at 810:2316, reflecting widespread selling pressure.

Nifty 50 witnessed a mild pullback in today’s session, closing lower after facing rejection near its recent swing highs. On the daily chart, price action indicates the formation of a short-term reversal candle following a failed attempt to sustain above the upper trendline of a rising channel, suggesting profit-booking at higher levels. The index remains above all its key moving averages. The relative strength index (RSI) has slipped marginally from overbought territory, currently hovering around 57, reflecting waning bullish momentum. Meanwhile, the MACD continues to trade above the signal line but shows signs of flattening, hinting at a potential slowdown in upward momentum.

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 RSI has eased slightly to around 62, indicating cooling momentum but still holding in bullish territory, reflecting a healthy pullback within an uptrend. Meanwhile, the MACD remains in positive alignment, though the histogram shows signs of narrowing, hinting at a potential slowdown in upward momentum.

The index closed lower, slipping below the 26,000 psychological mark as profit booking emerged at higher levels. On the downside, immediate support lies at 25,850, while a stronger base around 25,700 remains crucial for sustaining the broader uptrend. A decisive break below 25,700 could extend the decline toward 25,500–25,450 in the coming sessions. Conversely, on the upside, 26,250 will act as a key hurdle, and a sustained move above this level may trigger a fresh rally toward 26,300–26,500 in the near term.

How Nifty Bank Performed

Bank Nifty opened on a positive note but turned volatile in the second half of the session, eventually ending in negative territory. On the daily chart, it formed a second consecutive bearish candle, indicating continued profit booking. During the session, the index opened at 58,996.90, hit an intraday high of 59,309.90, and slipped to a low of 58,649.50 before closing at 58,835.35. This price action reflects selling pressure at higher levels and signals mild consolidation within the broader ongoing uptrend, suggesting a pause before the next directional move.

The RSI indicator displays a slight downward movement, currently at 63, indicating a short-term pause in momentum. The MACD has turned into a negative crossover. However, its position above the zero line reflects an overall positive undertone. According to the O’Neil methodology of market direction, Bank Nifty continues to remain in a Confirmed Uptrend, supported by a stable technical setup and steady buying on declines. In summary, the trend remains broadly constructive, with scope for further upside, provided the index maintains momentum above its key support levels.

Barring the past two sessions of mild profit booking, Bank Nifty shows no significant weakness. It continues to trade comfortably above all its key moving averages, with the 21-DMA near 58,331 acting as a crucial support level to monitor. As long as the index remains above this level, the overall outlook remains positive. Sustained buying interest could lift the index toward 59,500–60,000, while immediate support is seen around 58,000–57,500. A decisive break below this range may trigger a short-term pullback, though the broader setup continues to favor a buy-on-dips approach.

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.