Best stock recommendations today: MarketSmith India’s top picks for 2 July

The Sensex rose 91 points, or 0.11%, to end at 83,697.29, while the Nifty 50 gained 25 points, or 0.10%, to settle at 25,541.80.

However, broader markets underperformed. The BSE Midcap index slipped 0.07%, and the Smallcap index declined 0.18%.

Two stocks recommended by MarketSmith India for 2 July:

Buy: HBL Engineering Ltd (current price: ₹620.40)

• Why it’s recommended:Large recurring railway contracts, growth in EV mobility product, strong order book, improved corporate governance.
• Key metrics: P/E: 62.65, 52-week high: ₹ 664, volume: ₹ 1,488 crore
• Technical analysis: Cup-with-handle formation, trending above all its key moving averages on multi-timeframe chart.
• Risk factors: High valuation, short-term margin pressure, dependence on railway capex, and regulatory approval,
• Buy at: ₹ 620
• Target price: ₹ 760 in two to three months
• Stop loss: ₹ 555

Buy: GMDC Ltd (current price: ₹420.35)

• Why it’s recommended: Robust mining output and revenue growth, expansion in power and renewable energy, efficient cost, and margin efficiency.
• Key metrics: P/E: 19.54, 52-week high: ₹ 440, volume: ₹ 208 crore
• Technical analysis: Higher-top higher-bottom, strong Momentum on multi-timeframe, trending above all its key moving averages.
• Risk factors: High dependence on lignite, regulatory and environmental risk, commodity price volatility, stress in working capital.
• Buy at: ₹ 420
• Target price: ₹ 500 in two to three months
• Stop loss: ₹ 384

Nifty 50’s performance on 1 July

The Nifty 50 opened flat on Tuesday and moved within a narrow intraday range of just 92 points, fluctuating between 25,501 and 25,593 before settling almost unchanged. The subdued price action led to the formation of a narrow-bodied candle on the daily chart, signalling indecision and a lack of strong directional bias.

Market breadth remained muted, with the advance-decline ratio evenly split at 1:1. Most major sectoral indices closed in the red, except for Bank Nifty, Pharma, and Metal, which posted modest gains.

Despite the tight trading range, the Nifty 50 continues to maintain a strong bullish structure, trading above all key moving averages across multiple timeframes. Momentum indicators reinforce this view—the Relative Strength Index (RSI) is trending higher around 64 on the daily chart, suggesting sustained positive momentum. The daily MACD has also confirmed a bullish crossover, indicating strength in the prevailing trend.

As per O’Neil’s market direction methodology, the Nifty’s reclaiming of the 25,116 level has upgraded the market status to a Confirmed Uptrend as of 11 June, 2024.

While the overall sentiment remains constructive, the near-term upside appears limited. The index is expected to face resistance in the 25,700–25,800 zone, with potential extension toward 26,000. On the downside, immediate support is seen at 25,500, with a stronger support level around 25,200.

Nifty Bank’s performance on 1 July

The Nifty Bank index rose 0.26% on Tuesday in a volatile session but failed to surpass the previous day’s high. It traded within a choppy range and formed a small bullish candle with a lower wick on the daily chart—indicating intraday buying interest and support emerging in the 57,200–57,000 zone.

The gains were led by HDFC Bank and Kotak Mahindra Bank, while ICICI Bank and Axis Bank remained under pressure. In contrast, the broader financial index, FINNIFTY, underperformed slightly, ending down 0.18%.

Technically, Nifty Bank continues to reflect a strong bullish structure, trading well above all key moving averages across multiple timeframes. Momentum indicators remain supportive—the Relative Strength Index (RSI) is holding firm in bullish territory around 66, and the daily MACD has confirmed a positive crossover, suggesting continued near-term strength.

As per O’Neil’s market direction methodology, Bank Nifty has recently shifted from an Uptrend Under Pressure to a Confirmed Uptrend, reinforcing bullish sentiment.

The broader trend in banking stocks remains positive. A sustained hold above the 57,000 mark is likely to strengthen upward momentum, potentially driving the index toward the 58,500–59,000 zone in the coming sessions. On the downside, immediate support is placed at 56,500, with a more significant cushion seen near 56,000.

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, 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.