Stock recommendations for 9 November from MarketSmith India

Stock market recap: Indian benchmark indices shrugged off a sharp global selloff to extend their winning streak to a seventh straight session on Dhanteras, with the Nifty reclaiming the 25,000 mark on strong buying in large-cap banks and financials.

The Nifty surged 493.75 points, or 2.01%, to close at its day's high of 25,030.35, while the Sensex jumped 1,718.01 points, or 2.17%, to settle at 81,028.02. The benchmarks gained about 8.6% over the week.

The rally came despite a sharp overnight selloff on Wall Street, where the Nasdaq fell 5.5% amid concerns over AI regulation and stretched technology valuations. Sentiment was supported by nearly ₹15,000 crore in record foreign buying on Thursday and a 0.6% rise in the rupee to 93.91 against the dollar, even as Brent crude rebounded to around $97 a barrel.

Banks and financials led the gains, with the Bank Nifty rising 2.27%. Consumer durables and pharmaceuticals also advanced. ICICI Bank gained about 5%, while M&M and Titan rose around 3% each. Tata Motors Passenger Vehicles, Eicher Motors and Grasim, however, lagged.

The broader market was less buoyant, with mid- and small-cap stocks underperforming and market breadth remaining negative. A total of 1,439 stocks advanced, 2,141 declined and 126 remained unchanged.

Buy: Multi Commodity Exchange of India Ltd (current price: ₹3,530)

• Why it’s recommended: Strong growth in commodity derivatives trading volumes, supported by new product launches and increasing participation from institutional and retail investors, along with potential expansion into electricity derivatives and other commodity segments, can diversify revenue streams and strengthen market leadership.
• Key metrics: P/E: NA, 52-week high: ₹3,550.00, volume: ₹1,427.62 crore
• Technical analysis: Flat base pattern breakout
• Risk factors: High dependence on commodity market activity means that lower volatility or trading volumes could directly impact transaction revenues. Meanwhile, Sebi regulatory changes and increased competition from other exchanges may affect market share and profitability.
• Buy: ₹3,495–3,548
• Target price: ₹4,400 in two to three months
• Stop loss: ₹3,250

Buy: Karur Vysya Bank Ltd (current price: ₹370)

• Why it’s recommended: Improving credit growth in retail, MSME, and commercial lending segments supports earnings expansion, while better asset quality, lower NPAs, and increasing digital banking adoption can enhance profitability and operational efficiency.
• Key metrics: P/E: 6.15, 52-week high: ₹135.15, volume: ₹4,404.43 crore
• Technical analysis: Cup base pattern breakout
• Risk factors: An economic slowdown could lead to higher loan delinquencies and deterioration in asset quality. At the same time, competitive pressure from large private banks and fintech players may affect loan growth and net interest margins.
• Buy at: ₹366–372
• Target price: ₹425 in two to three months
• Stop loss: ₹348

How Nifty 50 performed

Indian equity markets ended Friday's session on a strong note, with the Nifty 50 surging 493.75 points, or 2.01%, to close at 25,030.35, reclaiming the psychologically important 25,000 mark. The index opened at 24,538.20, touched an intraday low of 24,388.05 and staged a sustained recovery to finish at the day's high, reflecting strong buying interest.

Sectoral performance was broadly positive, led by Nifty Private Bank (+3.22%) and Financial Services (+2.54%). Consumer Durables (+1.70%) and Pharma (+1.21%) also advanced, while Auto, FMCG, IT, Metal and PSU Bank indices ended higher. Media (-1.52%) was the notable laggard. About 1,439 stocks advancing, 2,141 declining and 126 remaining unchanged, translating into an advance-decline ratio of approximately 0.67:1.

The Nifty formed a strong bullish candlestick, closing at the day's high after breaking above its descending trendline, suggesting a potential reversal of the recent downtrend. The index also moved above all key moving averages, indicating an improvement in its trend structure. The Relative Strength Index (RSI) climbed to 78.55, signalling strong upward momentum but also entering overbought territory, which raises the possibility of near-term consolidation or profit booking. The MACD remained firmly bullish, with the MACD line above the signal line and the positive histogram expanding, pointing to strengthening momentum.

The rebound and close above 25,000 signal renewed buying interest and an improvement in near-term sentiment. However, sustained buying will be necessary to confirm the recovery and support a further move higher. On the upside, the 25,400–25,500 zone is expected to act as a key resistance area, where selling pressure could emerge. On the downside, 24,300–24,000 is likely to provide support and will be an important zone to watch for signs of weakness in the recovery.

How did the Nifty Bank perform?

On Friday, Nifty Bank opened slightly higher but came under early selling pressure before staging a sharp recovery to close at the day's high. The index opened at 57,812.90, touched an intraday low of 57,320.80 and climbed to a high of 59,086.00, where it settled, gaining 1,312.35 points, or 2.27%. The session formed a long bullish candle with no upper shadow, resembling a marubozu, indicating strong buying conviction. The rally also propelled the index decisively above its June–July peak near 58,600. ICICI Bank (+4.75%), HDFC Bank (+3.72%), Axis Bank (+3.35%) and Yes Bank (+5.91%) led the gains. On the other hand, AU Small Finance Bank (-0.98%), IDFC First Bank (-0.60%) and Union Bank (-0.53%) were among the notable laggards.

Momentum indicators reinforce the bullish breakout. The 14-period Relative Strength Index (RSI) jumped to 74.57, well above its average of 48.69, taking it into overbought territory. This reflects strong upward momentum but also raises the possibility of a short-term pause. The Moving Average Convergence Divergence (MACD) line, at 472.56, is above both its signal line at 367.17 and the zero line. The positive histogram has also widened to 105.39, pointing to strengthening momentum. The index is now trading above all key simple moving averages (SMAs), while the 21-day SMA is turning upwards towards the 50-day SMA. With the 100-day SMA above the 200-day SMA, the broader moving-average setup also favours a buy-on-dips approach.

On the downside, 58,000 is the immediate support, followed by Friday's low of 57,320. The convergence of the 100-day and 200-day SMAs around 56,630–56,740 provides a stronger support base. On the upside, 59,500 is the first hurdle, followed by the psychologically important 60,000 mark.

The rally has been supported by the strongest foreign institutional investor (FII) buying in more than two years and easing crude oil prices, helping Indian markets outperform amid a global technology sell-off. However, the overbought RSI reading and a rise in India VIX point to the possibility of near-term consolidation or mild profit booking. Despite this, the technical outlook remains positive as long as the index holds above 57,300.

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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