Pre-Budget Market Overview
The Indian stock market has witnessed a decline, with benchmark equity indices Sensex and Nifty 50 falling nearly 5% from their record highs. Milan Vaishnav, founder of Gemstone Equity Research and Advisory Services, suggests that Nifty may experience further dips in the near term. In a conversation with Moneycontrol, he indicated that the support level for Nifty is currently positioned between 24,500 and 24,750. He mentioned that Paytm is likely to see limited downside, while Swiggy could show strong recovery if it maintains its critical double bottom support around ₹296.
Nifty and Bank Nifty Strategy
According to Milan Vaishnav, Nifty has breached its 200-DMA (25,412) on the daily chart and is in an oversold zone. He predicts that the Nifty could slide further towards the 50-week moving average of 24,758. As the upcoming Budget for FY 2027 is set to be presented on February 1, along with decisions from the US Federal Reserve regarding interest rates, milder corrections in Nifty are expected. He believes Nifty will remain within a limited range, supported by the 24,500-24,750 levels. Regarding Bank Nifty, as long as it stays above the 50-week moving average of 55,467, its upward trend will continue. Currently, Bank Nifty stands at 58,473.10.
Stock Recommendations from Experts
Milan Vaishnav’s focus on relative strength in stocks has led him to recommend Bharat Electronics Limited (BEL) and Lupin as top picks. BEL has been a robust performer recently and has formed an ascending triangle on its high timeframe chart, indicating potential breakout opportunities. Lupin has also maintained an upward trend and is currently in consolidation, suggesting strong potential for upward movement.
Regarding Paytm and Swiggy, Vaishnav forecasts a recovery for both. Despite negative news impacting Paytm, he believes its primary upward trend remains intact, with limited downside observed. For Swiggy, technical weakness is apparent; however, if it holds its essential support around ₹296, a solid recovery may be forthcoming.
In the IT sector, Vaishnav noted that although total returns have been lower, the sector has performed robustly compared to broader markets. Stocks like HCL Tech and Tech Mahindra are trading above key moving averages across all timeframes, indicating substantial upside potential from current levels.
On midcap and small-cap stocks, Vaishnav recommends midcaps as better performers. Technically, he suggests that the Nifty small-cap index appears weak, while the Nifty midcap 100 index has successfully crossed multiple resistance levels and shows no signs of decline, instead stabilizing with improving relative strength compared to the Nifty 500.
