Markets
Stocks to buy: Two stock recommendations from MarketSmith India for 2 January
Summary
- Here are the two stock recommendations from MarketSmith India for Thursday, 2 January.
Nifty50 on 1 January
Nifty50, India's benchmark index, began the year 2025 on a positive note, gaining 98 points. On the first trading day of the year, the index had a muted start at 23,637.65 and traded within a range during the initial hours. However, strong buying activity in auto stocks (Maruti and M&M) and financial stocks (Bajaj Finance and Shriram Finance) helped the index move higher, reaching 23,822. In the final hour, Nifty pared some of its intraday gains and closed at 23,752.90. The broader market showed strong performance, with the advance-decline ratio skewed in favor of advancing stocks, settling at a 3:1 ratio.
From a technical perspective, the index traded below its 200-day moving average (DMA), trading approximately 0.6% beneath it. The 14-day relative strength index (RSI) shows a slight upward trend with a sideways bias, positioned around 41, on the daily chart, while the moving average convergence/divergence (MACD) indicator suggests a negative trend.
According to O'Neil's methodology of market direction, the current market status is in 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 (also known as downtrend).
The index is currently trading within a range between 23,600 and 23,900. Technical support is positioned around the 50-week moving average, which lies in 23,600–23,400 range. Given the current market conditions, a potential upside rebound cannot be ruled out, which could drive the index toward 23,900, with the possibility of further gains toward 24,200 in the near term. However, a sustained decline below 23,600 could pave the way for additional downside risk, targeting 23,400, followed by 23,200.
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How Nifty Bank performed?
Bank Nifty opened with a subdued start but showed improvement in price action after the first hour, driving the index into positive territory. The index found support near its 200-DMA and rebounded from that level during yesterday's trading session. It opened at 50,841.90, traded within a range of 51,321.95–50,485.05, and closed at 51,060.60, forming a bullish candle with a gain of 236 points (+0.46%) on Wednesday.
The RSI has slightly edged upward, currently at 41, while the MACD remains in negative territory on the daily chart.
According to O'Neil's market direction methodology, the index is in an "uptrend under pressure." The total distribution day count currently stands at three. A distribution day is defined as a session where the benchmark index or a major sectoral index declines 0.2% or more on a higher volume than the previous day.
At present, the index has been oscillating between the 200- and the 100-DMA since 19 December, 2024, indicating a sideways trend with a negative bias. Immediate resistance is positioned in the 51,700–52,000 range, while strong support lies between 50,500 and 50,400, coinciding with the 200-DMA in this price range.
Also Read: Top sectors to pick and avoid in 2025
Stocks to buy, recommended by MarketSmith India:
Netweb Technologies India Ltd: Current market price ₹ 2,889.95| Buy range ₹ 2,840–2,900| Profit goal ₹ 3,440| Stop loss ₹ 2,620| Timeframe 2–3 months
Maharashtra Seamless: Current market price ₹ 760.25 | Buy range ₹ 740–765| Profit goal ₹ 908| Stop loss ₹ 685| 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.
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