Stocks to buy: Two stock recommendations from MarketSmith India for 3 February

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Subscribe to enjoy similar stories. Nifty50, India's benchmark index, snapped its four consecutive sessions of winning streak and closed 26 points lower at 24,482.15 on Union Budget day. The index started the session with a muted opening at 23,528.60 and traded volatile during the budget presentation.

However, the index closed on a flat note at 23,482.15. As a result, Nifty formed a doji candle with a higher-high and higher-low price structure. On the weekly chart, the index snapped its three consecutive weeks of losses and formed a bullish candle.

The advance-decline ratio was flattened and settled around 1:1. Also read: Will investors flock to agri-stocks after the Budget? From a technical perspective, the index took resistance around its 200-EMA, which is currently placed around 23,620. The 14-day, relative strength index (RSI), continues to trend upward and is currently positioned around 51–52.

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

The index did not breach the correction low of 22,787 since day one. Hence, today's action qualifies as day three of an attempted rally. So, we are changing the market status to a Rally Attempt from a Downtrend.

From here, we would prefer to see a follow-through day before shifting the market to a Confirmed Uptrend. On the flip side, if Nifty breaches its recent low of 22,787, the market will be moved back to a downtrend. The index faced strong resistance around its