Stocks to buy: Two stock recommendations from MarketSmith India for today - 29 January
Subscribe to enjoy similar stories. Nifty50, India's benchmark index, snapped its two-day losing streak and closed 128 points higher at 22,957.25 on Tuesday. The index started the session with a gap-up opening at 22,960.45 and continued to gain intraday, taking cues from the RBI’s action to inject liquidity into the banking system.
However, the index settled at 22,957.25. The Nifty formed a high wave doji candle with a higher-high and higher-low price structure on the daily chart. Rate-sensitive indices such as banks, financials, real estate, and the auto sector gained.
Conversely, pharma, IT, FMCG, and metals sectors ended lower. The advance-decline ratio is inclined toward decliners as the ratio stands at 1:2. From a technical perspective, the index attempted to reclaim 23,000 during intraday but failed to close above it.
The 14-day, relative strength index (RSI), continues to trend sideways in a bearish trajectory and is currently positioned around 38. Another technical indicator, the moving average convergence/divergence (MACD), is still trending negatively below its central line. According to O'Neil's methodology of market direction, we shifted the market status to a ‘downtrend’ on Monday, as Nifty breached its recent correction low of 22,976.
Looking forward, we will shift the market to a ‘rally attempt’ when Nifty closes in the green for the first time or closes in the upper half of the day’s range and stays above that low for three straight sessions. From there, we would prefer to see a follow-through day before shifting the market back to a ‘confirmed uptrend’. Technically, the overall market sentiment has been negative for the past few weeks.
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