Stock recommendations for 30 October from MarketSmith India

Trent, Bajaj Auto, Eicher Motors, and Hindalco lagged. Breadth was positive, with 2,196 stocks advancing, 1,387 stocks declining, and 110 remaining unchanged. Two stock recommendations by MarketSmith India: Buy: FSN E-Commerce Ventures Ltd (current price: ₹352) Buy: National Stock Exchange of India Ltd (current price: ₹1,789) 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. 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. Trade name: William O’Neil India Pvt. Ltd. Sebi Registration No.: INH000015543