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Indian stock markets: Bearish forces have been unrelenting and the trends are unable to stage any recovery despite the best intentions. With the trends remaining challenged the road ahead is fraught with uncertainty. Looking for some encouraging triggers.

PAYTM: Buy above ₹1340, stop ₹1300 target ₹1440 (Multiday)

GLENMARK: Buy above ₹1995, stop ₹1970 target ₹2040 (Intraday)

BHARAT FORGE: Buy above ₹1441, stop ₹1420 target ₹1471 (Intraday)

Indian equity markets staged a strong rebound on 19 December after three consecutive sessions of decline, buoyed by supportive global cues and domestic strength.

The Sensex jumped nearly 600 points to an intraday high of 85,067, while the Nifty 50 reclaimed 25,993 on the upside. Finally, the Sensex closed 448 points, or 0.53%, higher at 84,929.36, while the Nifty 50 settled at 25,966.40, up 151 points, or 0.58%.

Gains were broad-based as the BSE Midcap and Smallcap indices rose more than a percent each. The BSE Midcap index jumped 1.26% while the Smallcap index rose by 1.25%.

The rally was underpinned by cooling US inflation data, which showed consumer prices rising 2.7% year-on-year in November, easing from 3% in September. This moderation has revived expectations of further rate cuts by the US Federal Reserve, boosting investor sentiment globally. A stronger rupee also added to the optimism, supporting foreign inflows. However, analysts cautioned that the inflation data may have been distorted by the recent government shutdown, urging investors to interpret the numbers carefully.

In our previous issue, we had mentioned that the bullish moves in Nifty continue to indicate a possibility of further advances. There were bouts of hesitation seen and the confluence of resistance does unnerve even the best of the mindsets.

The build-up to the geopolitical events did weaken the resolve shortly to bring down the markets as we witnessed heavy profit booking ahead of the event. The rate hike by Japan and the continued selling by FII resulted in the trends going through rigorous scrutiny. However, with the strong closure seen on Friday, bulls got inside the mindframe once again. They were unable to stamp their authority until Friday. Mid and Small cap flourished right through the week, as the focus on Futures remained muted.

On the overseas front, the stimulus initiative undertaken by the Federal Reserve is handling the lukewarm growth in the United States and does not foresee the hike in interest rates for the near term. Hence, we should not witness much volatility in the currency for this month. With no event triggers to affect the global outlook, we should look inwards for some cues for giving direction to the trend.

Post the RBI Policy where the governor offered a rate cut nothing much has moved except in the Metal space. With the global markets at a pensive stage there needs to be a stronger reason for him to initiate that move. An event-filled week could probably restrict the strong bullish undercurrent seen in the markets today. While it’s a given that we have to stay on the bullish side however it would be best to book profits as we see them.

The hourly charts of Nifty show that the rise seen since Thursday latter half of the day has risen strongly into the medina line that has played out quite well as a support and resistance line producing some strong set of recovery. Hence, a long can be initiate in Nifty if it moves above 26050 on Monday or on declines near 25900. The stop loss on this trade could be below 25800 for a rise towards 26200.

Why it’s recommended: Paytm (One97 Communications Ltd) is India's leading digital payments and financial technology company, offering services like mobile payments (UPI, QR codes, Soundbox), bill payments, e-commerce, travel booking, and financial products (loans, insurance, wealth management) for consumers and merchants. This stock has been consolidating for a while until on Friday the strong and robust volume that emerged has helped the surge. With the prices climbing higher and revival of momentum once again we can look at possibility of more upside. Look to buy.

Why it’s recommended: Glenmark Pharmaceuticals Ltd is a global, research-led Indian pharmaceutical company founded in 1977, known for its innovation in branded generics, specialty, and over-the-counter medicines, focusing heavily on dermatology, respiratory, and oncology. Post a sharp decline the prices are seen have reached a strong set of valuation support and are seen rebounding. Also, the RSI is seen inching higher with prices getting out of cloud on the daily charts highlight that there is a strong possibility to move higher.

Raja Venkatraman is co-founder, NeoTrader. His Sebi-registered research analyst registration no. is INH000016223.

Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by Sebi and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors.

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.

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