
Stocks to buy: MarketSmith India recommends these two stocks for 5 February

Summary
- MarketSmith India recommends these two stocks for Wednesday, 5 February.
Nifty50 on 4 February
Nifty50, India's benchmark index, closed 378 points higher at 23,739.25 on Tuesday after the US decided to pause the tariffs planned for Mexico and Canada, providing short-term relief from growing trade tensions. Taking cues from global markets, the index started the session with a gap-up opening at 23,509.90 and continued its bullish momentum throughout the day to close near the day’s high. As a result, the Nifty formed a bullish candle with a higher-high and higher-low price structure on the daily chart. Barring FMCG, all other major sectoral indices closed higher. The advance-decline inclined toward advancers as the ratio stood around 3:1.
From a technical perspective, the index managed to close above its 50- and 100-EMA. However, on 4 February, it faced some resistance around its 50-DMA. The 14-day relative strength index (RSI) is trending upward and is currently positioned around 57. Another technical indicator, the moving average convergence/divergence (MACD), has turned above positive crossover but is still trending below its central line.
According to O’Neil’s methodology of market direction, the Nifty staged a follow-through day as it advanced more than 1.5% on higher volume compared to Monday’s session. Hence, we are upgrading the market status to a Confirmed Uptrend. We may downgrade the status to an Uptrend Under Pressure if the distribution day count increases and Nifty breaches its key support level.
The index managed to close above its 50- and 100-EMA. However, it faced some resistance around its 50-DMA. Hence, moving ahead, 23,800–23,850 is a key level to watch in the coming days. A sustainable trading above 23,850 may lead the index toward the 200-DMA, i.e., 24,000–24,100 in the coming days. On the downside, the immediate support is placed at 23,400-23,200.
Also read | The calm before the storm: Three defence stocks on radar
How did the Bank Nifty perform?
Bank Nifty had a gap-up, gaining 328 points, and stayed in positive territory throughout the day. It formed a bullish candle with a higher-high and higher-low price structure on the daily chart. Yesterday, it opened at 49,538.80, fluctuated between 50,206.60 and 49,482.50, and closed at 50,157.95, marking a 1.93% gain.
From a technical perspective, the index faced minor resistance near its 50- and 200-EMA. The 14-day RSI has risen upward and is currently placed around 55 on the daily chart. The MACD also shows a positive crossover on the daily chart, though it is still 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 last week, as the Bank Nifty breached its current support level of 48,300 with an elevation in distribution days. Moving ahead, the recent low, i.e., 47,898.35, is a key level to watch, as we may shift the market status to a Downtrend if the index breaches this level.
At the current juncture, the Bank Nifty retested its 200-EMA and faced resistance near 50,208, which is a key level to monitor. If this resistance is breached, the index could move toward 50,800-51,000 in the coming days. On the downside, support is seen around 48,900.
Also read | Buying the dip? These five fundamentally strong stocks are down as much as 50% from 52-week highs.
Stocks recommended by MarketSmith India:
- Concord Biotech Ltd: Current market price ₹2,237.25 | Buy range ₹2,210-2,245 | Profit goal ₹2,800| Stop loss ₹2,030| Timeframe 2-3 months
- Amber Enterprises India: Current market price ₹6,918.75 | Buy range ₹5,750-6,970 | Profit goal ₹8,500 | Stop loss ₹6,100 | 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.
Also read | This stock has been moving in tandem with Nvidia. How deep do the parallels run?