Stocks to buy: Two stock recommendations from MarketSmith India for 10 January
Subscribe to enjoy similar stories. On Thursday, Nifty50, India's benchmark index, closed lower in a weekly F&O expiry trading session. Taking cues from the global market, the index started on a muted note and continued to drift lower towards 23,500 to close near the day’s low at 23,526.
As a result, it formed a bearish candle. Barring FMCG, all major sectoral indices closed lower. The advance-decline ratio leaned toward decliners and settled around a 1:3 ratio.
From a technical perspective, the index failed to hold above its 200-day moving average (DMA). Today, it tested its key support level, i.e., an upward-sloping trendline connecting the low of 21 November to that of 31 December 2024. The 14-day relative strength index (RSI) is trending downward around 40 on the daily chart, while the moving average convergence/divergence (MACD) indicator is still trending negative.
According to O'Neil's methodology of market direction, Nifty gained more than 1.7% with higher volume last Thursday. We upgraded the market condition to a ‘confirmed uptrend’. We may downgrade the status to an ‘uptrend under pressure’ if the distribution day count increases and Nifty breaches its key support level.
Currently, the index breached its 200-DMA and marginally traded above its key support level of 23,400. A fall below 23,400 may open a fresh downside window, pushing the index further toward 23,000. On the flip side, the index may face resistance around 23,800–24,000.
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