Stocks to buy: Two stock recommendations from MarketSmith India for 27 January

livemint.com:

Subscribe to enjoy similar stories. Nifty 50, India's benchmark index, had another muted start on Friday, trading with a negative bias throughout the session. It opened at 23,183.90, fluctuated within a narrow range of 23,347.30–23,050, and eventually closed at 23,092.20, down 113 points (-0.49%).

While the index saw some buying interest in the first half of the session, volatility took over in the second half. The advance-decline ratio skewed heavily toward decliners, settling at 1:3. On the weekly chart, the index formed three consecutive bearish candles in a row and lost around 111 points (-0.48%) on a weekly basis.

It is trending below the 50-week moving average (WMA) with a negative bias and has formed another lower-low price pattern on the weekly chart. Read this | Early birds warn of a stressful Q3 From a technical perspective, the index is trading below all its key moving averages. The 14-day relative strength index (RSI) is trending in a bearish trajectory and is currently positioned around 38.

Another technical indicator, the moving average convergence/divergence (MACD), is still trending negative below its central line. According to O'Neil's methodology of market direction, we are changing the market status to a Rally Attempt. Wednesday’s session was considered as day one of an attempted rally as Nifty closed in the green.

Nifty did not breach the correction low of 22,976.85 since day one. Hence, today's action qualifies as day three of an attempted rally. Therefore, we are changing the market status to a Rally Attempt from a Downtrend.