Stocks to buy: Two stock recommendations from MarketSmith India for 17 December
Nifty50 on 16 December
Nifty50 opened on a flat to negative note on Monday, traded negatively in the range of 24,781–24,601, and closed at 24,668. Market action during the day formed an ‘inside range small bearish candle’ on the daily chart. Metal, IT, FMCG, and energy dragged market sentiment and lost 0.5–1%. On the positive side, realty and pharma stocks outperformed, while the financial sector traded flat. The advance-decline ratio was neutral, and settled around 1:1.
Technically, the index failed to hold above its 100-day moving average (DMA), which is currently placed around 24,711, and closed below it. The momentum indicator, 14-period relative strength index (RSI), is trending in the flat zone and is currently placed around 57. Another technical indicator, moving average convergence/divergence (MACD), is trending upward, above its central line, indicating bullish sentiment.
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The ongoing trend indicates a bullish sentiment in the market. However, the index must trade sustainably above 24,700–24,800 for it to turn more bullish in the coming days. Sustainable trading above 24,800 may open a fresh upside window toward 25,000–25,200. However, failure to cross these levels may lead to choppy, range-bound trading. However, the probability of an upward move from current levels remains quite high.
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.
How Nifty Bank performed
Bank Nifty closed flat on Monday in a lackluster trading session and continued to face strong resistance in the range of 53,600–53,900. It opened on a negative note at 53,502.50 and traded within a narrow range of 53,335–53,739 throughout the day before closing at 53,581.35. As a result, the index formed a bullish candle with a higher-high and higher-low price structure on the daily chart.
The momentum indicator RSI is trending almost flat in a bullish trajectory and is currently placed around 63, along with a positive crossover on MACD above the central line.
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Currently, the index is trending sideways with a positive bias, and immediate upside resistance is placed in the range of 53,600–53,900, which is acting as a strong hurdle. Once this level is surpassed, the index may move toward 54,500 in the coming days.
According to O’Neil’s methodology of market direction, the current market status is ‘confirmed uptrend’. The uptrend begins with a follow-through day or when the index reclaims its previous uptrend high.
Two stocks to buy, recommended by MarketSmith India:
- Zee Entertainment Enterprises: Current market price ₹ 135.69 | Buy at ₹ 132–136| Profit goal ₹166 | Stop loss ₹ 121.50 | Timeframe 2-3 months
- Kotak Mahindra Bank Ltd: Current market price ₹ 1,804.45 | Buy at ₹ 1,780– 1,810 | Profit goal ₹ 1,990 | Stop loss ₹ 1,708 | Timeframe 2-3 months
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