Nifty Nears 21,000 as Analysts Pick Six Intraday Stocks, Including Infosys and LIC, for Thursday's Session

On Wednesday, December 6, 2023, the Nifty 50 closed at 20,938, up 83 points or 0.4 percent, leaving it roughly 40 points short of the 21,000 mark. During the session it had touched a new peak of 20,961. The BSE Sensex also set a lifetime high of 69,744, and the Bank Nifty reached 47,259. Strong global cues, driven by talk of interest rate cuts in the near term, lifted the benchmarks.

Broader markets were firm too. The small-cap index added 0.18 percent, and the mid-cap index reached a new high of 35,245. Siddhartha Khemka, Head of Retail Research at Motilal Oswal, called the sector picture a mixed bag, with buying in oil and gas, FMCG and IT. He also pointed to fresh buying in fertilizer stocks, after the government sought parliament's approval to increase the fertilizer subsidy.

The Bank Nifty told a different story. According to Ashwin Ramani of SAMCO Securities, it faced intense selling from the open, then consolidated and closed at 46,835, down 178 points. It formed a bearish engulfing candle on the daily chart, which is read as a bearish reversal signal. Ramani noted heavy call writing at the 47,000 strike, and said activity there would offer cues on the index's direction.

For the Nifty, Nagaraj Shetti of HDFC Securities said the short-term trend remains positive. But after a sharp climb in recent sessions, and with a hurdle near 20,910 (the 61.8 percent Fibonacci extension), he saw a possibility of consolidation or a minor correction from near 21,000. He placed immediate support at 20,800.

Khemka noted that the market has rallied about 11 percent since the lows of late October. Even so, the Nifty trades at a 12-month forward price-to-earnings ratio of 18.4 times, a 9 percent discount to its long-period average. On that basis he expects focus to shift toward large-cap stocks. The next trigger is the Reserve Bank of India's two-day policy meeting, which began Wednesday. Investors will listen to the governor's commentary for clues on a rate cut, keeping rate-sensitive sectors in focus.

Options data, from Chinmay Barve of Profitmart Securities, showed where traders were positioned. On the Nifty, call open interest was largest at the 21,000 strike (259,944 contracts) and the 21,100 strike (179,566), with 95,071 contracts added at 21,100. Put open interest was largest at 20,800 (209,488) and 20,900 (185,386), with 157,189 added at 20,900. On the Bank Nifty, call open interest peaked at 47,000 (126,044) and 47,500 (91,666), with 77,105 added at 47,000. Put open interest was concentrated at 46,500 (62,954), where 35,778 contracts were added, per NSE data at 3:30 pm.

Three analysts then named six stocks for Thursday. Sumeet Bagadia of Choice Broking suggested Infosys at ₹1,475, targeting ₹1,564 with a stop loss of ₹1,430, citing a breakout above ₹1,467 and a rounding bottom pattern. He also picked Glenmark Pharmaceuticals at ₹806.50, targeting ₹855 with a stop at ₹780, noting a breakout from a ₹780 to ₹805 range and an RSI of 59.

Ganesh Dongre of Anand Rathi suggested Whirlpool at ₹1,332, targeting ₹1,370 with a stop at ₹1,315, and Jindal Steel at ₹687, targeting ₹705 with a stop at ₹675. Both show bullish reversal patterns. Mitesh Karwa of Bonanza Portfolio suggested LIC on a dip to ₹744 to ₹746, targeting ₹780 with a stop below ₹726, and Lemon Tree at ₹117 to ₹118, targeting ₹127 with a stop at ₹113. Both stops apply on a daily closing basis. These are the views of individual analysts, not of Mint.

Thursday's session will turn on whether the Nifty clears 21,000 or pauses, and on what the RBI governor says about rates.