Stocks to buy: MarketSmith India recommends these two stocks for 6 February
Subscribe to enjoy similar stories. The Nifty 50, India's benchmark index, closed 43 points lower at 23,772.05 and snapped its two-day gaining streak. Taking cues from the global markets, the index started the session with a muted opening at 23,801.75 and continued to trade in a broad range of 23,680–23,810 to close near the day’s low.
As a result, the index formed a bearish candle on the daily chart. Barring FMCG and realty, all other major sectoral indices closed higher. The advance-decline ratio was inclined toward advancers, as it stood around 2:1.
From a technical perspective, the index managed to close above its 50- and 100-EMA. However, today, it faced some resistance around its 50-DMA as well as a downward-sloping trendline connecting the high of September 2024 to that of December 2024. The 14-day, relative strength index (RSI), is trending sideways and is currently positioned around 56.
Another technical indicator, the moving average convergence/divergence (MACD), has turned above positive crossover but is still trending below its central line. According to O'Neil's methodology of market direction, the Nifty staged a follow-through day on Tuesday as it advanced more than 1.5% on higher volume than Monday’s session. Hence, we are upgrading the market status to a Confirmed Uptrend.
We may downgrade the status to an Uptrend Under Pressure if the distribution day count increases and the Nifty breaches its key support level. The index has now approached its 50-DMA, i.e., 23,770. Hence, moving forward, the 50-DMA is a key level to watch.
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