Stock recommendations for 29 October from MarketSmith India

Stock market recap: Benchmark indices fell on Wednesday, as selling in IT stocks and Reliance Industries weighed on sentiment amid rising crude oil prices and caution ahead of the US Federal Reserve’s policy decision.

The Sensex closed at 73,246.03, down 352.64 points, or 0.48%, while the Nifty fell 50.90 points, or 0.22%, to settle at 22,698.85.

Broader markets, however, advanced on selective buying. The BSE SmallCap Select index rose 0.85%, while the MidCap Select index gained 0.66%.

Shares of Jio Platforms, the Reliance Industries-backed digital services company, made a strong stock market debut on Wednesday. The stock ended nearly 27% above its issue price of ₹1,119, making Jio Platforms India’s second-most valuable listed company after Reliance Industries, with a market capitalisation of about ₹13 trillion.

Buy: TVS Motor Co. Ltd (current price: ₹4240)

• Why it’s recommended: Strong EV (iQube) adoption, premium motorcycle portfolio (Apache/Norton), and increasing market share in scooters are driving volume and profitability growth. Robust export growth across Africa, Latin America, and Asia, supported by ongoing capacity expansion and a diversified product portfolio.
• Key metrics: P/E: 53.42, 52-week high: ₹4,484.50, volume: ₹559.91 crore
• Technical analysis: Reclaimed its 50-DMA
• Risk factors: Intense competition in the two-wheeler and EV segments could pressure market share, pricing power, and margins. Exposure to commodity cost inflation and demand cyclicality in domestic and export markets may impact profitability.
• Buy: ₹4,198–4,261
• Target price: ₹4,850 in two to three months
• Stop loss: ₹3950

Buy: Omnitech Engineering Ltd (current price: ₹719)

• Why it’s recommended: Large order book from oil & gas, energy, and industrial customers provides strong revenue visibility and execution-led growth. Capacity expansion, diversification into motion control/automation and aerospace-defence opportunities can accelerate scale and margins.
• Key metrics: P/E: NA, 52-week high: ₹764.85, volume: ₹120.37 crore
• Technical analysis: Trendline Breakout
• Risk factors: Delays in ramping up new facilities or executing the sizeable order book could affect growth expectations and returns. Dependence on energy-sector demand and fluctuations in raw material costs can create earnings and margin volatility.
• Buy at: ₹712–723
• Target price: ₹850 in two to three months
• Stop loss: ₹677

How Nifty 50 performed

Indian equity markets ended Wednesday lower, with the Nifty 50 falling 50.90 points, or 0.22%, to 22,698.85 amid sectoral weakness and selective buying. The index swung between an intraday low of 22,497.70 and a high of 22,778.05 before settling below its previous close of 22,749.75.

Sectoral performance was mixed. Nifty Auto (+1.45%), Consumer Durables (+1.41%), Media (+1.38%), Healthcare (+1.15%) and Pharma (+1.04%) led the gains, while Oil & Gas (-2.27%) and IT (-1.98%) were the biggest laggards, followed by Realty (-0.89%) and FMCG (-0.56%). Broader market breadth remained positive, with 1,931 stocks advancing, 1,628 declining and 119 unchanged, taking the advance-decline ratio to 1.19:1.

Technical outlook

The Nifty formed a small-bodied candle with a long lower shadow, signalling buying interest at lower levels. Although the index remains below key medium- and long-term moving averages, with its descending trendline intact, recent price action points to an attempt at short-term consolidation following the sharp correction.

Momentum indicators show some improvement. The Relative Strength Index (RSI) stood at 44.90, above its signal average of 43.09 but below the neutral 50 mark. The MACD was at -139.71, above its signal line of -185.41, with a positive histogram of 45.71, suggesting strengthening bullish momentum despite both readings remaining in negative territory.

Key levels to watch

The 22,500–22,400 range remains a crucial support zone. A decisive break below it could trigger fresh selling, dragging the index towards 22,200–22,000. On the upside, 23,000–23,200 is likely to act as a key resistance zone following the recent breakdown from those levels.

How did the Nifty Bank perform?

Nifty Bank opened lower on Wednesday but rebounded from its intraday lows to outperform the broader market. The index opened at 53,793.25, touched a high of 54,440.25 and a low of 53,626.15 before closing at 54,267.40, up 292.50 points, or 0.54%. Buying near 53,600 helped form a bullish candle with a lower shadow, signalling demand at lower levels.

Among heavyweight constituents, State Bank of India (+1.24%), Axis Bank (+1.19%) and HDFC Bank (+0.75%) led the gains. Bank of Baroda (-0.90%), ICICI Bank (-0.67%) and Kotak Mahindra Bank (-0.56%) were the main laggards. AU Small Finance Bank (+3.67%) and IDFC First Bank (+3.04%) topped the gainers, while Yes Bank (-1.82%) was the weakest performer.

Technical outlook

The 14-period Relative Strength Index (RSI) stands at 39.53, below its average of 43.49. Although it has recovered from around 37, it remains below the neutral 50 mark, indicating weak momentum. The MACD is at -433.10, below its signal line at -380.07, with a histogram reading of -53.03. Both lines remain in negative territory, keeping the bearish crossover intact, though the relatively narrow histogram suggests selling pressure is easing.

The index continues to trade below its key simple moving averages (SMAs), with the 50-day SMA at 56,052 falling below the 100-day SMA at 56,694 and the 200-day SMA at 56,756. This points to a bearish broader structure, and the latest rebound will need follow-through before it can signal a trend reversal.

Key levels and outlook

Immediate support lies at 53,600, the day's low, followed by the 53,000–52,800 zone, which marks the June swing lows. On the upside, the 21-day SMA at 54,865 is the first hurdle, followed by 55,500. Stronger resistance lies in the 56,050–56,750 range, where the 50-, 100- and 200-day SMAs converge.

Macroeconomic cues remain mixed, with Brent crude near $115–116 a barrel, continued foreign portfolio investor (FPI) outflows and the US Federal Reserve's policy decision due tonight. The index is likely to remain range-bound between 53,600 and 54,900 in the near term. A decisive close above the 21-day SMA could open the way towards 55,500, while a break below 53,600 could trigger renewed selling pressure.

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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