2 top stock recommendations from Vinay Rajani

Indian equity markets traded with a cautious undertone as the benchmark Nifty surrendered most of its early gains highlighting the lack of fresh momentum. Despite the intraday weakness, technical analysts believe the broader trend remains constructive, with the current phase largely reflecting consolidation rather than a reversal.

Speaking to ET Now, Vinay Rajani from HDFC Securities said the market is moving within a well-defined range after forming a long-leg doji candlestick pattern last week, indicating indecision among market participants.

“The market seems to be in a mood of consolidation. Last week, Nifty formed a long-leg doji candlestick pattern. It was a holiday-truncated week, with last week’s high at 24,261 and the low at 23,784. The index has been consolidating within this range for the last six to seven sessions,” he said.

“If we look at the moving average setup, Nifty is currently holding above its 20-day and 50-day moving averages, which are coinciding around the 23,850 level. On the higher side, however, Nifty has not been able to surpass its 100-day exponential moving average, placed around 24,150. This indicates a complete consolidation phase—above the 20-day and 50-day EMAs but below the 100-day EMA—which shows that confidence is still lacking,” he added.

Rajani also pointed out that the broader market, which had been outperforming in recent months, has begun to lose momentum in the short term, adding to the cautious outlook.

“The broader market, which was previously outperforming, has started losing momentum on the upside and is showing weakness on the short-term charts. Overall, we may continue to consolidate within the current range. On the downside, 23,800 to 23,780 remains an important support zone. Unless this level is broken, we can continue to remain hopeful about the market. Selective sectors are still performing well. Today, pharma and healthcare are outperforming,” he said.

Financials and Pharma Remain Preferred Bets
While the benchmark indices may remain range-bound, Rajani believes sector-specific opportunities continue to exist. He remains optimistic about financials, particularly banking and NBFC stocks, while pharma continues to display relative strength.

“If we look at the sectors, the NBFC and banking space are relatively stronger on the positional charts. Overall, the primary trend of the market remains upward, and we believe financial stocks can be accumulated at lower levels. Dips should be bought. Right now, it is a muted short-term setup, but 23,800 should be kept as the stop-loss on a closing basis,” he said.

Stock Picks for Traders
On individual stock recommendations, Rajani highlighted opportunities in the pharma and NBFC segments, citing strong technical setups.

“Considering the sector strength, pharma is doing very well today and its primary trend remains positive. The index is trading near its all-time high, and the healthcare sector is also performing well. Within the sector, Gland Pharma is looking quite strong. It is on the verge of breaking out from a consolidation pattern, while the primary trend remains positive. Around ₹2,360, one can go long with a trading stop-loss at ₹2,310. On the upside, I expect a target of ₹2,470,” he said.

He also recommended L&T Finance as his preferred pick from the financial space.

“The second stock I would pick is from the NBFC space. L&T Finance is one stock that we believe could perform well in the coming weeks. Although it has corrected slightly in the intraday session, we believe the dip should be bought. Around ₹300–301, one can go long with a stop-loss at ₹295. On the upside, I expect a short-term target of ₹312,” he said.

Near-Term Outlook
With Nifty caught between key moving averages, traders are likely to watch the 23,800 support level closely. A decisive move beyond the current trading range could determine the market’s next direction. Until then, analysts continue to favour a stock-specific approach, with financials and pharma emerging as preferred sectors during the consolidation phase.