Buy or sell stocks: Indian stock market benchmarks- the Sensex and the Nifty 50- closed with losses for the week ended November 8, primarily due to foreign capital outflow amid concerns over weak Q2 earnings and elevated valuations. A 25 bps rate cut by the US Fed offered no relief as the market had already discounted it. The US-election-related uncertainty is over now, and the market's focus is back on fundamentals.
"The Indian market continues to experience consolidation due to heightened selling pressure from FIIs, driven by concerns over weak corporate earnings and premium valuations. This broad-based correction is particularly evident in sectors with excessive valuations," Vinod Nair, the head of research at Geojit Financial Services, observed.
"The anticipated slowdown in domestic Q2 GDP growth has further dampened market sentiment. Conversely, the appealing valuations of other Asian peers and ongoing stimulus measures by China are also contributing to the underperformance of the national market," said Nair.
Despite the recent correction, the valuation of the Indian stock market remains elevated. Moreover, India Inc.'s September-quarter earnings have been softer, making investors cautious.
Experts see the zone near 24,000 as key support for the Nifty 50. A fresh wave of selloff may start if the index breaks below this level.
According to Amol Athawale, VP-Technical Research at Kotak Securities, 24,100 and 24,000 would act as key support zones for the Nifty 50. If the index sustains above the same, it could retest to the level of 24,500, and further upside may also continue, which could lift the index to 24,600. However, below 24,000, the sentiment could change, and traders may prefer to exit from long trading positions.
Infosys remains in a long-term uptrend. The stock has experienced a throwback from its consolidation range near record-high levels and has attempted to find support near demand zones.
It has shown signs of a strong reversal from a key demand area, indicating renewed buying interest at these support levels.
If the stock crosses and sustains above the ₹1,860 level, it may rally further toward the ₹1,960 mark.
The Relative Strength Index (RSI) is currently at 46.84, rebounding from the oversold zone.
This upward RSI movement supports the ongoing uptrend and indicates strengthening momentum, suggesting continued buying interest if price action aligns with these technical signals.
Infosys has also bounced off its 200-day EMA (exponential moving average), a significant long-term support level, though it remains below the 20-day and 50-day EMA levels.
Moving above these short—and medium-term EMAs could further confirm the uptrend, offering a stronger buying opportunity.
"Based on these technical indicators, we recommend taking a long position in Infosys at 1,829.95, with a stop-loss at ₹1,760 to manage risk and a target price of ₹1,960, aligning with the current favourable market sentiment," said Bagadia.
Hindustan Unilever recently experienced a sharp sell-off from higher levels.
The stock shows signs of support and has formed a bullish candle near key support levels, suggesting the possibility of a reversal if buying interest continues in this zone.
A sustained move above ₹2,530 could confirm the reversal and potentially trigger a rally toward the ₹2,685 level.
The Relative Strength Index (RSI) stands at 31.40, with a positive crossover near the oversold zone.
This indicates strengthening momentum and supports the likelihood of an upward move if price action aligns.
Although Hindustan Unilever is trading below its key moving averages, including the 20-day, 50-day, and 200-day EMAs, the recent reversal suggests the stock may retest these levels.
"A decisive close above ₹2,530 would present a buying opportunity, with technical indicators and momentum favouring a short-term bullish outlook, targeting a move toward ₹2,685," said Bagadia.
Larsen & Toubro remains in a long-term uptrend. Over the past few months, the stock has been consolidating in a wide range near its record high levels.
Recently, it has shown a reversal from its demand zone, supported by increased trading volumes, signalling renewed buying interest and a potential resumption of the upward trend.
The Relative Strength Index (RSI) stands at 59.49, indicating a sideways-to-upward momentum. This reflects strengthening investor sentiment and suggests that the stock may continue to trend higher if the positive momentum is sustained.
The stock trades above its key moving averages, including the 20-day, 50-day, and 200-day EMAs, further supporting the bullish outlook.
"Given the current technical indicators and price action, L&T appears well-positioned for a potential upward move. Investors might consider buying at ₹3,660.30, with a stop loss set at ₹3,505 to manage risk. The target of ₹3,990 aligns with key resistance levels and offers a favourable risk-reward ratio, making this a promising trading opportunity with the potential for further gains," said Bagadia.
Read all market-related news here
Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.
