Stock recommendations for 30 October from MarketSmith India

Stock market recap: Benchmark equity indices Sensex and Nifty rallied more than 1% on Thursday, led by gains in banking, FMCG and IT shares, as crude oil prices eased and the US Federal Reserve held interest rates steady.

The Sensex surged 905.01 points, or 1.24%, to close at 74,151.04, its highest level in more than a week. The NSE Nifty gained 237.90 points, or 1.05%, to settle at 22,936.75.

Adani Ports, Power Grid, and Kotak Mahindra Bank led the gains, rising 3–4%, while Jio Platforms extended its post-listing gains. Trent, Bajaj Auto, Eicher Motors, and Hindalco lagged. Breadth was positive, with 2,196 stocks advancing, 1,387 stocks declining, and 110 remaining unchanged.

Buy: FSN E-Commerce Ventures Ltd (current price: ₹352)

• Why it’s recommended: Strong beauty & personal care leadership with omnichannel expansion, owned brands, and rising profitability driving sustained revenue growth. Fashion business scaling rapidly through customer acquisition, premium brand partnerships, and improving margins, creating a second growth engine.
• Key metrics: P/E: 360.63, 52-week high: ₹352.90, volume: ₹263.16 crore
• Technical analysis: Flat base pattern breakout
• Risk factors: Intensifying competition from e-commerce and beauty platforms could pressure market share, customer acquisition costs, and margins. Demand remains linked to discretionary consumer spending, making growth vulnerable to economic slowdowns and weaker consumption trends.
• Buy: ₹348-354
• Target price: ₹399 in two to three months
• Stop loss: ₹330

Buy: National Stock Exchange of India Ltd (current price: ₹1,789)

• Why it’s recommended: Dominant market position in Indian cash and derivatives trading, benefiting from increasing investor participation and capital market penetration. Diversifying revenue streams through listings, data services, clearing, co-location, and new products such as electricity derivatives.
• Key metrics: P/E: NA, 52-week high: ₹1,878.00, volume: ₹15.08 lakhs
• Technical analysis: Trendline Breakout
• Risk factors: Revenue is highly dependent on trading volumes, particularly derivatives, making earnings sensitive to regulatory changes and market activity. Technology failures, cybersecurity incidents, and ongoing regulatory scrutiny/legal matters could adversely impact operations and reputation.
• Buy at: ₹1,771–1,798
• Target price: ₹1,900 in two to three months
• Stop loss: ₹1,740

How Nifty 50 performed

ndian equity markets ended sharply higher on Thursday, with the Nifty 50 gaining 237.90 points, or 1.05%, to close at 22,936.75, supported by broad-based buying across key sectors. The index opened at 22,690.65, touched an intraday low of 22,656.75 and climbed to a high of 22,961.95, settling near the day's peak and signalling sustained buying interest.

Sectoral indices ended largely in positive territory, led by Nifty Realty, which rose 2.75%, followed by FMCG (2.34%), PSU Bank (2.20%) and Private Bank (1.24%). IT gained 0.99% and Metal rose 0.67%, while Auto was the notable laggard, slipping 0.24%. Broader market participation remained positive, with 2,196 stocks advancing, 1,387 declining and 110 remaining unchanged, translating into an advance-decline ratio of 1.58:1.

The Nifty 50 formed a bullish daily candle, closing near its intraday high and extending its recovery from recent lows. A series of higher lows points to an improving short-term trend. However, the broader outlook remains cautious, with the index trading below key medium- and long-term moving averages. Its recent breakdown below the earlier horizontal consolidation range also suggests that further gains will be needed to confirm a meaningful trend reversal.

Momentum indicators point to an improvement in sentiment. The Relative Strength Index (RSI) rose to 50.85, moving above the neutral 50 mark and its signal average of 44.75, indicating strengthening bullish momentum. The Moving Average Convergence Divergence (MACD) also registered a bullish crossover, with the MACD line at -114.18 moving above the signal line at -171.17. The positive histogram reading of 56.99 further suggests that selling pressure is easing.

Key levels

The index rebounded sharply from lower levels and closed above its 21-day moving average (21-DMA), signalling renewed buying interest and improving near-term sentiment. On the downside, the 22,500–22,400 range remains a crucial support zone. A decisive break below this range could invite fresh selling pressure, potentially dragging the index towards 22,200–22,000.

On the upside, the 23,000–23,200 range is likely to act as a significant resistance zone, following the recent breakdown from these levels. A sustained move above this range would be needed to strengthen the recovery.

How did the Nifty Bank perform?

Nifty Bank opened lower at 54,175.60, against the previous close of 54,267.40, but recovered steadily after testing an intraday low of 54,047.90. The index climbed to a high of 54,980.15 before closing at 54,909.65, up 642.25 points, or 1.18%.

The session produced a strong bullish candle, taking the index back above its 21-day moving average (21-DMA). This marks the second consecutive session of gains from the 53,500–54,000 demand zone, raising the possibility of a double-bottom formation. Among heavyweight constituents, Kotak Mahindra Bank led the gains, rising 4.32%, followed by State Bank of India (1.58%) and ICICI Bank (0.65%). HDFC Bank was the only major heavyweight to close lower, slipping 0.29%. Yes Bank fell 1.15%, while IDFC First Bank declined 0.20%.

Momentum indicators suggest that selling pressure is easing, although the broader trend remains weak. The Relative Strength Index (RSI) rose to 47.06, moving above its signal average of 44.25, but remained below the key 50 mark. The RSI also formed a higher low against a lower low in price, indicating mild positive divergence and lending some support to the potential bottom formation.

The Moving Average Convergence Divergence (MACD) stood at -388.39, marginally below its signal line at -381.73. However, the histogram narrowed to -6.66, suggesting that a bullish crossover may be approaching. Both indicators remain in negative territory, underscoring the weakness in the broader trend.

The index continues to trade below its 50-day, 100-day and 200-day moving averages. The 100-DMA is also slipping below the 200-DMA, reinforcing the bearish medium- to long-term outlook. For now, the rebound appears to be a recovery within a broader downtrend rather than a confirmed trend reversal.

On the downside, 54,050 is the immediate support level, close to Thursday's intraday low, followed by the swing low around 53,500. A break below 53,500 would weaken the potential double-bottom formation. On the upside, 55,000 is the first hurdle. A sustained move above this level would bring the 50-DMA near 56,000 into focus, followed by the 100-DMA and 200-DMA cluster around 56,700.

The macroeconomic backdrop has improved, with the US Federal Reserve holding interest rates steady and banks reporting healthy second-quarter results. Kotak Mahindra Bank, for instance, reported a 26% increase in consolidated profit. However, Brent crude oil prices near $115 a barrel remain a risk.

A close above 55,000 could extend the recovery towards 56,000. Failure to break through this resistance, however, could keep the index range-bound between 54,000 and 55,000.

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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