Stocks to buy: Two stock recommendations from MarketSmith India for 30 January

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Subscribe to enjoy similar stories. The Nifty 50 extended its winning streak for a second straight session, closing 206 points higher at 23,163.10. Tracking positive global cues, the index opened strong at 23,026.75 and maintained its bullish momentum throughout the session.

Optimism surrounding global tech stocks and anticipation of the US Federal Reserve’s policy outcome fuelled gains, lifting the index for the second consecutive day. This led to the formation of a morning star candlestick pattern on the daily chart, though the pattern lacked volume support in yesterday’s session. Sector-wise, FMCG was the only laggard, while all other major indices ended in the green.

The broader market also participated in the rally, with the advance-decline ratio heavily favouring advancers at 6:1. Read this | Dr. Agarwal's Health Care IPO: Is a clearer vision on the horizon? From a technical perspective, the index reclaimed the 23,000 level, signalling strength.

The 14-day Relative Strength Index (RSI) continues to trend sideways with an upward slope, currently positioned around 42. Meanwhile, the Moving Average Convergence Divergence (MACD) has turned positive, albeit below its central line. According to O’Neil’s market direction methodology, we downgraded the market status to a Downtrend on Monday after the Nifty breached its recent correction low of 22,976.

To shift the market to a Rally Attempt, the index must either close in positive territory or finish in the upper half of its daily range and sustain above 22,976 for three consecutive sessions. A follow-through day would then be required to confirm a return to an Uptrend. While the Nifty has closed in the green for the past two sessions, it remains at a critical juncture.