
Stocks to buy: Two stock recommendations from MarketSmith India for Friday - 24 January

Summary
- Here are the two stock recommendations from MarketSmith India for Friday, 24 January.
Nifty50 on 23 January
Nifty50, India's benchmark index, ended higher on Thursday at 23,205.35 in a range-bound session. The index started the session on a muted note at 23,128.30 and traded sideways within a range-bound zone of 23,270.80–23,090.65, supported by IT, pharma, and auto stocks.
The index continued to trade in a consolidation range of 22,976–23,426. The broader market snapped its two-day losing streak as the advance-decline ratio was inclined toward advancers and settled around 3:2.
From a technical perspective, the index is trading below all its key moving averages and technical support levels. The 14-day relative strength index (RSI) slope is trending sideways and is currently positioned around 41. 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 have 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’.
Also Read: Nifty options activity hints at positive market close today
Technically, the overall market sentiment has been negative for the past couple of weeks. Currently, the index is trending below all its key moving averages within the range-bound zone of 23,000–23,400 for the last eight trading sessions, and either side breakout or breakdown may lead the index in the same direction. In the case of sustainable trading below 23,000, the index may move from this level 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.
How Nifty Bank performed
On Thursday, Bank Nifty opened on a muted note. However, it later remained traded sideways with a negative bias for the majority of the trading session and ultimately closed in the red. Yesterday, the index formed a bearish candle with a higher-high and higher-low price structure on the daily chart. It opened at 48,770.15, traded in the range of 48,892.70–48,493, and closed at 48,589.
The 14-day RSI is trending sideways and is currently positioned around 38 on the daily chart. Another trend-following 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 within the range of 50,000–48,000. The current market sentiment suggests that it may trade with volatility in these ranges, and either side breakout may move in the same direction.
Stocks to buy, recommended by MarketSmith India:
Pidilite Industries Ltd: Current market price ₹2,909.65| Buy range ₹2,850–2,920| Profit goal ₹3,350| Stop loss ₹2,720| Timeframe 2–3 Months
Paras Defence and Space Technologies Ltd: Current market price ₹1,079.05 | Buy range ₹1,060–1,090| Profit goal ₹1,290 | Stop loss ₹1,008| 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.