Stocks to buy: Two stock recommendations from MarketSmith India for Tuesday-26 November

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Subscribe to enjoy similar stories. As expected in the previous day's market commentary, the Indian benchmark index Nifty50 opened with a strong gap-up, taking cues from the Maharashtra state election and positive global sentiment. The index opened 346-point higher at 24,253, registered an intraday high at 24,351, and closed at 24,222.

The advance-decline ratio favoured the bulls at 5:3, while the volatility index, India VIX, cooled off by 5%. Technically, the index broke out of a strong gap-up above a downward sloping trendline, starting from the recent all-time high, and formed a ‘doji’ candle on Monday. The 14-period RSI on the daily chart formed a double-bottom pattern and is currently trending in an upward direction.

Other technical indicators, MACD and ADX/DMI, indicated positive trend reversal. The current market trend suggests the emergence of a bullish trend, with the index having the potential to move toward 24,400 (i.e., 38.2% Fibonacci retracement of the recent decline), followed by 24,800 (i.e., 50% Fibonacci retracement of the recent decline) in the coming days. According to O'Neil's methodology of market direction, the market status has shifted to a rally attempt on Friday as Nifty stood above the recent low for three straight trading sessions.

Also Read: Three recently debt-free stocks mutual funds can’t get enough of This major sectoral index opened with a gap-up and remained traded in positive territory throughout the day. This index moved in line with the expectations in the previous commentary. It opened at 52,046 and closed near the day’s high at 52,207.50, gaining 2.10% during the session.