Raja Venkatraman recommends three stocks for 20 July

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Indian equities closed higher on Friday, with IT and financial stocks driving gains after strong earnings updates from Tech Mahindra and Jio Financial. The Nifty 50 advanced 1.09% to 24,334.30, while the Sensex climbed 1.25% to 78,151.45, helping both benchmarks swing into weekly gains despite trading in their narrowest band of 2026.

Indian equities closed higher on Friday, with IT and financial stocks driving gains after strong earnings updates from Tech Mahindra and Jio Financial. The Nifty 50 advanced 1.09% to 24,334.30, while the Sensex climbed 1.25% to 78,151.45, helping both benchmarks swing into weekly gains despite trading in their narrowest band of 2026.

Reliance Industries rose 2.4% ahead of its June-quarter results, with the promoter group lifting its stake to 50.48%. Financials added 1.3%, led by Jio Financials’ 3.1% jump on a profit beat, while HDFC Bank and ICICI Bank gained ahead of their weekend earnings. The IT index surged 1.8%, powered by Tech Mahindra’s 4.1% rally after revenue growth, capping a strong week for the sector. TCS soared nearly 10% this week — its best in six years — as softer U.S. inflation boosted sentiment and eased rate-hike concerns.

Overall, the Nifty and Sensex ended the week up 0.5% and 0.8% respectively, consolidating within a tight 368-point range between 24,000 and 24,368. Nine of sixteen sectors posted weekly gains, though small- and mid-caps slipped, breaking their winning streak.

Global cues added to the mix, with Brent crude climbing 12.5% this week to $86 a barrel amid escalating U.S.-Iran tensions. Analysts noted that despite geopolitical risks and monsoon-related inflation worries, investors found support in steady IT earnings and bottom-fishing after the sector’s sharp year-to-date decline.

As we head towards the end of the July series, the slow movement continued to generate enough strength to head higher. The resultant volatility has led to some momentary capitulation at the start of the week. However, positive global cues have once again reinstated the bullish momentum. With positive winds beginning to blow, we should be looking at the trends to stretch further.

We were looking for more gains and steady markets in the last issue. The market faced a challenge after the July 8 dramatic fall when the news of the US-Iran war once again spiked up, igniting fear once again. However, the lack of follow-through ensured that the prices managed to hold on until Friday, when the slow and steady revival from lower levels helped the prices sustain the support levels at 23800 and give a closing above 24300, which we have been mentioning in our letters. Now, the issue of bullish trends was never in doubt.

Small and Mid-caps with good Q1 numbers that have been a big contributor for the Nifty despite the negative global cues. With Banks not living up to the expectations, it is curbing the bullish enthusiasm. However, steady sector rotation thought out the week, in particularly in IT, Banks and Pharma, was sufficient to push the Nifty to a new high close.

Prices have now moved up by smartly from lows of June 8 and that ought to bring a bit of a halt to the bearish mindset that was lingering. Eventually, something will give way and one has to wait for that to happen rather than anticipate it and avoid trading. Worse would be for those who are taking up a view that this has to happen soon and therefore are going short. Actually, it is such type of traders who are really feeding the trend higher by being force to cover their shorts. Now , a move towards 25000 is very much possible as the bullish momentum is gathering pace.

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

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