Stocks to buy: Two stock recommendations from MarketSmith India for 30 December
Subscribe to enjoy similar stories. Nifty50, the benchmark index of the Indian stock market, took support around its 50-week moving average (WMA), currently placed around 23,570, and formed a small green candle on the weekly timeframe chart. It gained around 1% over the last week.
On the daily chart, it remained volatile over the last week and hovered around its 200-day moving average (DMA), which is currently placed around 23,860. it formed multiple doji candles on the daily chart and failed to close above its 200-DMA. On Friday, the index opened at 23,801 with a small gap-up and traded within the range-bound zone of 23,940–23,800, closing at 23,813 with a mild gain of 0.27%.
Market action on Friday formed another doji candle with an upper wick, indicating selling pressure at the day’s high. The advance-decline ratio settled on a flat note, 1:1. Technically, the index has been trading below its 200-DMA for the past five trading sessions and is facing strong resistance around it.
However, on the weekly chart, support is placed around its 50-WMA. The momentum indicator, 14-day relative strength index (RSI), is trending in the flat zone with a negative bias and is placed around 41 on the daily chart, along with a negative crossover on moving average convergence/ divergence (MACD). According to O'Neil's methodology of market direction, the current market status is in a “rally attempt".
A rally attempt begins on the third day when the index closes higher off the most recent bottom after being in a correction (also known as downtrend). The index is currently hovering below its 200-DMA and trading within a range-bound zone of 23,600 to 23,900. Technically, strong support is placed around 23,600–23,500.
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