Stocks to buy: Two stock recommendations from MarketSmith India for 21 January
Subscribe to enjoy similar stories. The Nifty 50, India's benchmark index, opened with a positive gap-up, taking cues from the global markets and Q3 numbers of Kotak Bank and Wipro. Later, it traded in a volatile manner.
However, it has protected its Friday’s low. The index opened at 23,290, traded within the range-bound zone of 23,390–23,170, and closed at 23,345. The market action during the day formed a bullish candle, with a lower wick indicating buying support at lower levels.
On the sectoral front, banking, financials, metal, and energy sectors were the top gainers, while FMCG and auto declined the most. The advance-decline ratio was inclined toward advancers and settled around 2:1. From a technical perspective, the index is still trading below all its key moving averages and key technical support levels.
The slope of the 14-day relative strength index (RSI) has turned in an upward direction. However, it is still trending in the bearish zone and is currently positioned around 41. The moving average convergence/divergence (MACD) indicator is still trending negatively below its central line.
According to O'Neil's methodology of market direction, we shifted the market status to a rally attempt as on last Thursday. From here, we would prefer to see a follow-through day before shifting the market status to a confirmed uptrend. On the downside, the recent low of 23,047 is a key level to watch, a fall below this level may cause the market direction to change from a rally attempt to a correction.
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