Markets
Stocks to buy for 18 February: MarketSmith India recommends these two stocks
Summary
- Here are two stocks to buy as recommended by MarketSmith India for Tuesday, 18 February.
Stock market today: A recap
India's benchmark index, Nifty 50, broke its eight-day losing streak, closing 30 points higher at 22,959. The session began with a negative opening at 22,810 and slid further toward 22,725. However, after reaching an intraday low, the index managed to recover and close flat at 22,959, forming a bullish candle with a lower-high and lower-low price structure.
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Barring IT, Auto, and FMCG sectors, all major sectoral indices ended in the green. Despite this, the advance-decline ratio was heavily skewed toward decliners, with a 1:2 ratio.
Technical outlook for Nifty 50
Nifty continues to hover near its critical support zone of 22,700–22,800, trading below all key moving averages with a negative bias. The 14-day relative strength index (RSI) is trending downward, currently at 38, while the MACD indicator has crossed negatively below the central line.
According to O'Neil's market direction methodology, the market status was downgraded to a 'downtrend' on Nifty's breach of the 22,787 swing low. A shift to a 'Rally Attempt' will occur if Nifty closes in the green for the first time or remains in the upper half of the day’s range for three consecutive sessions. We would look for a follow-through day before moving the market back to a Confirmed Uptrend.
Nifty 50 support and resistance levels
Immediate support lies around the 22,800–22,700 range. A break below these levels may lead to a more bearish outlook. On the upside, a sustained move above 23,000 could trigger a bounce toward the 23,350–23,400 range.
How Nifty Bank performed
On Monday, 17 February, Nifty Bank opened with a negative bias but saw buying interest from lower levels, pushing the index into positive territory. The index formed a bullish candle with a lower-high and lower-low price structure on the daily chart and retested its 21-day moving average (DMA). The index opened at 48,880.40, fluctuated between 49,286.55 and 48,525.60, and closed at 49,258.90, marking a 0.32% gain for the day.
Technical indicators
The 14-day RSI has been moving sideways and is currently around 46. The MACD has shown a positive crossover but is still trending below its central line.
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According to O'Neil's market direction methodology, the market status was downgraded to 'Uptrend Under Pressure' last Friday after the index breached its 21-DMA and the distribution day count rose to six, signaling weakness. A shift to 'Downtrend' will occur if the distribution day count increases further or if Bank Nifty fails to hold above the recent correction low of 47,898.35. Conversely, the status will return to 'Confirmed Uptrend' if the index reclaims its recent rally high of 50,641.75.
Support and resistance
The index recently breached its 21-DMA, located near 49,314, which should be closely monitored to gauge market strength. If the index reclaims and holds above this level, it could move toward the 50,000–50,500 range. On the downside, immediate support is seen at 48,700–48,500.
Two stocks to buy, recommended by MarketSmith India:
● Ashok Leyland Ltd: Current market price ₹ 223.61| Buy range ₹ 215–225 | Profit goal ₹ 262 | Stop loss ₹ 202 | Timeframe 1–2 Months
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● Sarda Energy & Minerals Ltd: Current market price ₹ 480.65 | Buy range ₹ 466–485| Profit goal ₹ 590| Stop loss ₹ 438| Timeframe 1–2 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.
