Stocks to buy: Two stock recommendations from MarketSmith India for 30 January
Nifty 50 on 29 January: A recap
The Nifty 50 extended its winning streak for a second straight session, closing 206 points higher at 23,163.10. Tracking positive global cues, the index opened strong at 23,026.75 and maintained its bullish momentum throughout the session. Optimism surrounding global tech stocks and anticipation of the US Federal Reserve’s policy outcome fuelled gains, lifting the index for the second consecutive day. This led to the formation of a morning star candlestick pattern on the daily chart, though the pattern lacked volume support in yesterday’s session.
Sector-wise, FMCG was the only laggard, while all other major indices ended in the green. The broader market also participated in the rally, with the advance-decline ratio heavily favouring advancers at 6:1.
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From a technical perspective, the index reclaimed the 23,000 level, signalling strength. The 14-day Relative Strength Index (RSI) continues to trend sideways with an upward slope, currently positioned around 42. Meanwhile, the Moving Average Convergence Divergence (MACD) has turned positive, albeit below its central line.
According to O’Neil’s market direction methodology, we downgraded the market status to a Downtrend on Monday after the Nifty breached its recent correction low of 22,976. To shift the market to a Rally Attempt, the index must either close in positive territory or finish in the upper half of its daily range and sustain above 22,976 for three consecutive sessions. A follow-through day would then be required to confirm a return to an Uptrend.
While the Nifty has closed in the green for the past two sessions, it remains at a critical juncture. A sustained hold above 23,000 could keep the bias positive, with potential upside toward 23,400 in the near term. However, if the index fails to maintain this level, market sentiment may turn lacklustre, limiting upside momentum.
How Nifty Bank performed
On Wednesday, Bank Nifty had a gap-up opening (131 points higher) and remained in positive territory throughout the day. The index formed a second bullish candle in a row and closed near the day’s high. Now, the index is approaching its 21-DMA, which is placed near 49,280. The index opened at 48,997.20, traded in the range of 49,199.65–48,849.80, and closed at 49,165.95, marking a gain of 0.61%.
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The 14-day, RSI, has moved upward and is currently positioned around 46 on the daily chart. Another trend-following indicator, MACD, shows a positive crossover on the daily chart but is still trending below the central line.
According to O’Neil’s methodology of market direction, we downgraded the market status to an Uptrend Under Pressure on Monday as Nifty Bank breached its current support level of 48,300 with an elevation in distribution days. Moving forward, the recent low, i.e., 47,898.35, is a key level to watch as we may shift the market status to a Downtrend, when the index breaches it.
The index is currently trading below its key moving averages and remains in the sideways zone of 48,000–49,700. The current technical placement suggests that sustainable trading above 49,350, may lead the index toward 49,600–49,700 in today’s session.
Stocks recommendations by MarketSmith India:
● Equinox India Developments Ltd: Current market price ₹ 142.35 | Buy range ₹ 138–143 | Profit goal ₹ 169 | Stop loss ₹ 129 | Timeframe 3–4 Months
Also read | Timely guidance for stock market investors
● GHCL Ltd: Current market price ₹ 700.70 | Buy range ₹ 680–705 | Profit goal ₹ 840 | Stop loss ₹ 648 | Timeframe 2–3 Months
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.
