Nifty 50 gained 28.75 points (0.11%) to settle at 25,694.35, while Sensex climbed 187.64 points (0.23%) to close at 83,570.35. Despite a strong start fueled by a 5.6% surge in Infosys and optimistic revenue guidance, mid-session profit booking in heavyweights like Cipla and Jio Financial trimmed the initial gains.
Market breadth remained cautious as the advance-decline ratio favored bears, with 22 advances against 28 declines on the Nifty 50 index. On the sectoral front, Nifty IT was the standout performer, surging over 3.3%, while the Pharma and Consumer Durables indices faced selling pressure. Macroeconomically, sentiment was supported by news of a potential India-US trade deal, though persistent FII outflows and elevated crude prices capped the upside.
Two stock recommendations for 19 January by MarketSmith India
Buy: DCB Bank Limited (current price: ₹187.5)
- Why it’s recommended: Strong focus on retail and MSME lending, healthy asset quality improvement trend, comfortable capital adequacy, stable NIMs supported by granular deposits, experienced management team, consistent profitability track record, improving CASA ratio, and a prudent risk management approach.
- Key metrics: P/E: 8.96, 52-week high: ₹190.50, volume: ₹54.64 crore
- Technical analysis: Cup with handle breakout
- Risk factors: Smaller scale versus large private banks, high competition in the retail and MSME space, sensitivity to economic slowdowns, asset quality pressure during stressed cycles, dependence on wholesale funding, margin pressure in a falling rate cycle, and regulatory and compliance risks.
- Buy: ₹186–189
- Target price: ₹215 in two to three months
- Stop loss: ₹176
Buy: Mtar Technologies Limited (current price: ₹2,660)
- Why it’s recommended: Niche precision engineering capabilities, strong presence in space, defence, and clean energy, long-term contracts with marquee clients (ISRO, DRDO, and global OEMs), high entry barriers and a strong technical moat, healthy order book visibility, focus on high-margin complex components, and an export-oriented business mix.
- Key metrics: P/E: 181.32, 52-week high: ₹2,809, volume: ₹315.39 crore
- Technical analysis: Cup base breakout
- Risk factors: Dependence on government and PSU orders, project execution delay risk, customer concentration exposure, cyclical nature of capex-driven sectors, margin pressure from raw material costs, high working capital requirements, and limited pricing flexibility.
- Buy at: ₹2,650–2,680
- Target price: ₹3,150 in two to three months
- Stop loss: ₹2,560
How the Nifty 50 performed on 16 January
Indian equities ended Friday’s session on a cautious note, with Nifty 50 closing marginally higher at 25,694.35, up 0.11%, after a volatile intraday move. The index opened firm and scaled a fresh intraday high of 25,873, but profit booking at higher levels dragged it off the peak, reflecting hesitancy ahead of near-term global and domestic cues. Sensex mirrored the trend, settling largely flat by the close.
Market breadth remained weak despite the positive close, as the advance-decline ratio was skewed in favour of declines with 1,339 stocks advancing against 1,828 declines, indicating selective participation and underlying caution.
On the sectoral front, IT stocks outperformed sharply, driven by renewed buying interest and a firm outlook, while PSU Banks and Private Banks provided modest support. On the other hand, Pharma, FMCG, Healthcare, Metals, and Consumer Durables witnessed selling pressure, weighing on overall sentiment. Nifty Auto also ended lower amid stock-specific profit taking.
The index formed a small-body candle after intraday volatility, highlighting indecision near higher levels following a failure to sustain recent swing highs. From a trend perspective, the index has been consistently trading between its 50-day and 100-day moving averages for the past five trading sessions, indicating a phase of consolidation rather than trend reversal.
Momentum indicators are showing mild fatigue. The RSI has slipped below its recent average and is trending lower, although it remains within neutral territory, reflecting a loss of upside momentum without entering oversold conditions. Meanwhile, the MACD remains below its signal line with a negative histogram, reinforcing the view of weakening short-term momentum, even as the broader trend stays positive.
According to O’Neil’s methodology of market direction, Nifty’s breach of the 50-DMA and 25,700 has shifted the market status to an “uptrend under pressure”. Further deterioration into a downtrend is possible if distribution days continue to rise or if the index fails to hold above its 100- and 200-DMA. Conversely, a decisive breakout above 26,373, the recent rally high, is required to restore a confirmed uptrend.
Nifty continues to hover around its 50- and 100-DMA, maintaining a mild negative bias in the near term. On the downside, immediate support is placed at 25,500, with a stronger demand zone seen around 25,300, which is expected to cushion any deeper corrective move. From a trend perspective, the broader uptrend is yet to regain momentum, and a sustained move above 26,000 remains crucial.
How did Nifty Bank perform?
Nifty Bank opened on a positive note and sustained buying interest throughout the session. The index opened at 59,590, slipped to an intraday low of 59,510, and subsequently witnessed a steady rebound from lower levels. Buying momentum strengthened as the session progressed, pushing the index to an intraday high of 60,235, before finally closing near the day’s highs at 60,095, registering a healthy gain. The intraday price action highlights strong dip-buying interest and confirms the presence of institutional support at lower levels. Despite broader market volatility, the index demonstrated relative strength, reflecting confidence in banking heavyweights and reinforcing the prevailing bullish undertone in the sector.
Momentum indicators continue to remain supportive. The RSI is placed around the 61 zone, indicating positive momentum while staying well below overbought territory, which leaves room for further upside. The MACD remains in positive territory, with the signal line holding above the zero line, suggesting that the medium-term trend remains intact. The flattening of momentum seen earlier has gradually given way to renewed strength, indicating improving participation from buyers. Overall, the momentum setup aligns with trend continuation rather than exhaustion at current levels. According to O’Neil’s methodology of market direction, Nifty Bank remains in a Confirmed Uptrend.
The index has closed in positive territory for the past four consecutive sessions, signalling renewed strength and improving buying interest across the broader market. This sustained upward momentum suggests that market participants are increasingly willing to accumulate minor declines. If buying interest continues, the index is likely to test its immediate resistance near 60,437 and may gradually move into 60,500–61,000 in the coming days. On the downside, immediate support is placed in 59,400–59,200, which is expected to act as a strong demand area and cushion any short-term pullbacks.
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.