Stocks to buy: Two stock recommendations from MarketSmith India for 4 February
Subscribe to enjoy similar stories. Nifty50, India's benchmark index, closed 120 points lower at 23,361.05 as global uncertainty weighed on sentiment. The decline was driven by US President Donald Trump’s trade tariffs, a weaker rupee, and concerns over subdued government spending.
Following global market cues, the index opened with a gap-down at 23,319.35 and traded within a narrow range of 23,222–23,381. As a result, Nifty formed a bearish candle, characterized by a lower-high and lower-low price structure. Barring IT and Consumer Durables, all major sectoral indices ended in the red.
Market breadth favored declines, with the advance-decline ratio settling at approximately 1:3. Read this | Short circuit: Foreign investors likely to press the sell button this week On the technical front, Nifty50 faced resistance near its 200-EMA before turning negative. The 14-day Relative Strength Index (RSI) is trending slightly downward, currently positioned around 48–49.
Meanwhile, the Moving Average Convergence Divergence (MACD) has formed a positive crossover but remains below its central line. According to O'Neil's methodology of market direction, we are changing the market status to a Rally Attempt. Last Tuesday's session was considered day one of an attempted rally as Nifty closed in the green.
Nifty did not breach the correction low of 22,787 since day one. Hence, Monday'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 a
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