Stocks to buy: Two stock recommendations from MarketSmith India for 20 December
Subscribe to enjoy similar stories. Nifty50 extended its losses for the fourth consecutive session and closed at 23,951 on Thursday. Taking cues from the global market, the index started the day with a gap-down opening at 23,877.15 and traded sideways in a narrow range of 24,870.30-24,004.90.
After touching an intraday low of 24,870 the index pared some of its losses and closed at 23,951.70. The widespread decline was primarily driven by the US Fed’s hawkish stance on interest rates. Barring Pharma, all major sectoral indices closed lower.
The advance-decline ratio was in favour of decliners and settled around 1:2. Also read: City gas distribution stocks climb the wall of worry The index breached its Friday low of 24,180. As per the polarity principle of technical analysis, it has remained below 24,000.
The momentum indicator, 14-period relative strength index (RSI), has turned downward and fallen to 40. Another technical indicator, moving average convergence/divergence (MACD), has also turned negative. According to O'Neil's methodology of market direction, the current market status is a ‘rally attempt’.
A rally attempt begins on the third day when the index closes higher off the most recent bottom after being in a correction. Also read: Coromandel bets on backward integration to boost profitability Moving forward, the 200-DMA (23,825) is a key support for the index. Failure to hold above its 200-DMA may cause the index to fall toward its previous swing low, i.e.
23,300–23,260. On the flip side, if it manages to hold above its 200-DMA, it is likely to hover between 23,800-24,200 today. On Thursday, Nifty Bank extended its loss and breached its 50- and 100-DMA on the daily chart.For the past three trading sessions, the
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