Stocks to buy: Two stock recommendations from MarketSmith India for 27 December
Subscribe to enjoy similar stories. Nifty50 has been hovering below its 200-day simple moving average (SMA/DMA), which is currently around 23,850, for the past four trading sessions and has faced strong resistance around it. Market action on Thursday formed another doji candle in a row below the 200-DMA.
The index opened at 23,775, remained in the range of 23,855-23,653, and closed at 23,750 with a marginal gain of 0.10%. The auto and pharma indices were the biggest gainers (0.92% and 0.83%, respectively), while the FMCG, metal and bank indices lost 0.10-0.30%. The advance-decline ratio inclined towards decliners and settled around 2:3.
The momentum indicator, 14-period Relative Strength Index (RSI), is trending in the flat zone with a negative bias and placed around 39 on the daily chart along with negative moving average convergence/divergence (MACD) crossover. Also read | KFin Tech mcap tops CAMS: Is its diversified revenue stream overhyped? According to the O'Neil methodology of market direction, the current market status is a “rally attempt". A rally attempt begins the third day the index closes higher off the most recent bottom after being in a correction.
Overall market sentiment remains negative, with the index currently trading within 23,600-23,900. A breakout in either direction could lead the index to continue in that particular direction. On the upside, a move above 23,850-23,900 could drive the index towards 24,000–24,200.
Conversely, a decline below 23,600 may trigger more downward movement. Bank nifty opened on a positive note and hit an intraday high of 51,740. The index faced resistance near its 100-DMA and formed a “high wave candlestick" pattern during Thursday’s trading session.
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