Two stock recommendations by MarketSmith India:

Buy:Global Health Ltd(current price: ₹ 1303.30)

• Why it’s recommended: Patients volumes and revenue growth, network expansion, enhanced margin, and EBITDA expansion.
• Key metrics: P/E: 73, 52-week high: ₹ 1,328.80, volume: ₹ 51.62 crore
• Technical analysis: Trending above all its key moving averages, pivot breakout
• Risk factors: Near-term margin pressure, execution risk, regulatory risk, and stretched valuation
• Buy at: ₹ 1,303
• Target price: ₹ 1,560 in two to three months
• Stop loss: ₹ 1,195

• Why it’s recommended: Strong AUM and lending momentum, profitability turnaround, growth in retail and wholesale disbursement.
• Key metrics: P/E: 56.90, 52-week high: ₹ 1,275, volume: ₹ 299.37 crore
• Technical analysis: Trending above all its key moving averages, cup-with-handle breakout.
• Risk factors: Rising credit cost, asset quality pressure, funding uncertainties,
• Buy at: ₹ 1,217
• Target price: ₹ 1,480 in two to three months
• Stop loss: ₹ 1,095

Nifty 50 Recap

Nifty50 index experienced a volatile trading week, declining 1.22% on a weekly basis. This led to the formation of another bearish candle on the weekly chart, continuing the ‘lower-high lower-low’ price structure. Among sectoral performances, Nifty IT index emerged as the worst performer, while Pharma stood out as the top gainer over the week.

On Friday, the index fell sharply 0.81%, closing below the crucial 25,200 mark and forming a bearish candle on the daily chart. Sectoral participation remained weak, with most major indices ending in the red. Notably, Nifty IT and Auto sectors underperformed, while Pharma managed to close in positive territory. Broader market sentiment deteriorated, as both Nifty Midcap and Smallcap indices closed near their respective intraday lows. The overall market breadth was negative, with a 2:1 advance-decline ratio, highlighting broader selling pressure across the board.

Nifty50 has breached its 21-DMA and closed below it, indicating near-term weakness. On the daily chart, the relative strength index is trending downward and currently hovers near 48, reflecting waning bullish momentum. Additionally, a negative crossover in the MACD further reinforces the weakening short-term trend. However, on the weekly timeframe, technical indicators remain relatively constructive. The RSI continues to track a bullish trajectory around 58, supported by a positive MACD crossover, suggesting the broader trend still retains a bullish undertone despite short-term corrective moves.

According to O’Neil’s methodology of market direction, Nifty reclaimed its recent high of 25,116. Hence, the market status has been upgraded to a Confirmed Uptrend as of 11 June 2024.

Nifty50 extended its downward momentum on Friday, closing below the 21-DMA amid a volatile trading week and settling below 25,200. The 25,000–24,900 range now emerges as a crucial support zone to monitor. On the upside, resistance levels are positioned near 25,500, followed by 25,700. Overall, the prevailing trend suggests a phase of sideways consolidation within the broad range of 24,900–25,500 in the near term.

How did Nifty Bank Perform?

Nifty Bank index declined approximately 0.49% over the past week, forming a small bearish candle accompanied by a long upper wick, indicating profit booking near higher levels. On the daily chart, the index lost 0.35% on Friday, closing on a bearish candle. It opened at 56,843.45 and traded within a narrow range between 57,091 and 56,607 before settling at 56,754. FINNIFTY mirrored this weakness, following a similar downward trajectory and closing the session with a loss of close to 0.49%.

The index found support near its 21-DMA on Friday, closing above this level and maintaining a position above all its key moving averages on the daily chart. However, the daily relative strength index is trending lower and currently hovers around 52, indicating a loss of short-term momentum. This is further corroborated by a negative crossover on the daily MACD. In contrast, the weekly RSI continues its bullish trajectory, supported by a positive MACD crossover, suggesting that the medium-term trend remains intact despite recent short-term weakness.

As per O’Neil’s methodology of market direction, Bank Nifty remains in a “Confirmed Uptrend”, a trend it has sustained over the past few weeks.

Bank Nifty closed below the critical 57,000 level on Friday, displaying a clear negative bias. Continued trading below this threshold could intensify selling pressure, potentially driving the index toward the 56,200–56,000 support zone in the near term. Conversely, a decisive break and sustained hold above 57,000 may lead to range-bound activity between 57,000 and 57,600.

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, developed by legendary investor William J. O’Neil. You can access a 10-day free trial by registering on its website.

Trade name: William O’Neil India Pvt. Ltd.

Sebi Registration No.: INH000015543

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.