Stocks to buy: Two stock recommendations from MarketSmith India for 22 January
Nifty 50 on 22 January
Nifty 50, India’s benchmark index, closed lower at 23,024.65 after a volatile trading session. The index opened at 23,421.65 but remained in the red for most of the day. Selling pressure escalated in the final hour as investors reacted cautiously to US President Donald Trump’s tariff decisions and disappointing Q3 earnings, which dragged the index to multi-month lows.
The day’s market movement erased gains from the previous five sessions, forming a large bearish marubozu candlestick pattern on the daily chart. All major sectoral indices closed in the red, and the broader market experienced a sharp correction. The advance-decline ratio favoured decliners, settling at around 1:3.
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From a technical perspective, Nifty is trading below all its key moving averages and support levels. The 14-day relative strength index (RSI) is on a downward trajectory, currently at 35, while the moving average convergence/divergence (MACD) remains negative, trading below its central line.
Based on O’Neil’s methodology for market direction, we have downgraded the market status to a Downtrend after Nifty breached its recent correction low of 23,047. Going forward, we will shift the market status to a Rally Attempt if Nifty closes in the green for the first time, or closes in the upper half of the day’s range and holds above that low for three consecutive sessions. At that point, we would look for a follow-through day before returning to a Confirmed Uptrend.
Currently, the index is trading below all its key moving averages, coupled with negative market sentiment. On the downside, immediate support is at 23,000, which is a crucial level to monitor. A sustained move below this level could drive the index toward 22,800–22,700, followed by 22,200. On the upside, key resistance levels are 23,400, followed by 23,600.
Nifty Bank performance
On Tuesday, Bank Nifty opened on a positive note but quickly became volatile as the session progressed. Selling pressure intensified, leading to a roller coaster ride throughout the day. The index formed a bearish candlestick with a lower-high and lower-low price structure on the daily chart. It opened at 49,532, traded within a range of 49,543.15–48,430.95, and closed at 48,570.90.
The 14-day RSI, a momentum indicator, is in the bearish zone and has started to trend downward, currently positioned around 38 on the daily chart. Additionally, the MACD remains below the central line, showing a negative crossover.
According to O’Neil’s methodology of market direction, Nifty Bank staged a follow-through day as it advanced more than 1.7% on higher volume on Monday, compared to the previous trading session. Hence, we upgraded the market status to a Confirmed Uptrend from a Rally Attempt. If the index breaches 48,300 with more distribution days, we may downgrade the market status to an Uptrend under Pressure.
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The index is currently trending below all its key moving averages in the range of 50,000–48,000. The current market sentiment suggests that it may trade volatile within these ranges.
Stocks to buy, recommended by MarketSmith India:
- Marico Ltd: Current market price ₹ 666.40 | Buy range ₹ 646–670 | Profit goal ₹ 800 | Stop loss ₹ 612 | Timeframe 2–3 Months
- Tata Consumer Products Ltd: Current market price ₹ 972.10 | Buy range ₹ 960–975 | Profit goal ₹ 1,050 | Stop loss ₹ 925 | Timeframe 2–4 Weeks
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
