
Stocks to buy: Two stock recommendations from MarketSmith India for 23 January

Summary
- Here are the two stock recommendations from MarketSmith India for Thursday, 23 January.
Nifty50 on 22 January
Nifty50, India's benchmark index, closed higher at 23,155.35 on Wednesday, supported by IT and BFSI stocks. The index started the session on a positive note at 23,099.15 and traded sideways for most of the session. However, after HDFC Bank's Q3 earnings, it traded higher and closed near the day’s high.
Nifty is currently trading in a consolidation range of 22,976–23,426. On the sectoral front, IT, pharma, and financial stocks gained. Meanwhile, realty and energy stocks continued to decline. Further, the broader market continued to slide as the advance-decline ratio was inclined toward decliners and settled around 1:3.
From a technical perspective, the index is trading below all its key moving averages and key technical support levels. The 14-day relative strength index (RSI) slope is trending sideways and is currently positioned around 39. Another technical indicator, the moving average convergence/divergence (MACD), is still trending negative below its central line.
According to O'Neil's methodology of market direction, we shifted the market status to a ‘downtrend’ as Nifty breached its recent correction low of 23,047. Looking forward, we will shift the market to a ‘rally attempt’ when Nifty closes in the green for the first time or closes in the upper half of the day's range and stays above that low for three straight sessions. From there, we would prefer to see a follow-through day before shifting the market back to a ‘confirmed uptrend’.
Currently, the index is trending below all its key moving averages on the daily chart along with a negative sentiment. On the downside, the immediate support of 23,000 is a key level to watch, as sustainable trading below this level may lead to a move toward 22,800–22,700, followed by 22,200. However, in case of an upside bounce back, 23,400, followed by 23,600, are the immediate resistances.
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How Nifty Bank performed
Bank Nifty closed higher at 48,724.40 in a highly volatile trading session. The index started the session on a muted note at 48,689.55 and traded sideways for the initial hours. However, post 11 am, the index turned negative and touched an intraday low of 48,074.05. Further, after HDFC Bank’s Q3 earnings, the index recovered from the day’s low and closed near the day’s high. As a result, it formed a long-legged doji candle on the daily chart.
The 14-day RSI is trending sideways and is currently positioned around 39 on the daily chart. Another technical indicator, MACD, is trending below the central line with a negative crossover.
According to O'Neil's methodology of market direction, Nifty Bank staged a follow-through day as it advanced more than 1.7% on higher volume on Monday compared to the previous trading session. Hence, we upgraded the market status to a Confirmed Uptrend from a Rally Attempt. If the index breaches 48,300 with higher distribution days, we may downgrade the market status to an Uptrend Under Pressure.
The index is currently trending below all its key moving averages in the range of 50,000–48,000. The current market sentiment suggests that it may remain traded volatile in these ranges.
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Stocks to buy, recommended by MarketSmith India:
HDFC Bank: Current market price ₹ 1,666.05| Buy range ₹ 1,640–1,670| Profit goal ₹ 1,840| Stop loss ₹ 1,590| Timeframe 2–3 Months
Bharti Airtel: Current market price ₹ 1,631.75 | Buy range ₹ 1,610–1,635| Profit goal ₹ 1,850| Stop loss ₹ 1,558| 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.