Stocks to buy: Two stock recommendations from MarketSmith India for 9 December

Meanwhile, RBI maintained status quo on the repo rate at 6.50% for the 11th consecutive meeting and retained its policy stance at “neutral". However, the RBI has cut the cash reserve ratio (CRR) by 50bps to keep it at 4.0%, which is expected to infuse additional liquidity into the banking system and revive economic growth. Furthermore, the RBI has revised the GDP forecast for FY2024–25 to 6.6% from the earlier estimate of 7.2%. 

Also Read | Pivot wait: RBI's monetary policy points to a rate cut in February

Technically, the index retraced 50% of the recent fall in the index and is now facing resistance around its 100-DMA. Hence, the 100-DMA, currently placed around 24,700, may act as a crucial level in today’s trading session. The momentum indicator, 14-period relative strength index (RSI), was trading in an upward direction and is currently placed around 59. Another technical indicator, moving average convergence/divergence (MACD), is trending with a positive crossover and is placed above the central line.

The ongoing trend indicates a bullish sentiment in the market. However, the index is facing resistance around its 100-DMA, around 24,700. Fresh bullish positions can only be taken if the index crosses and holds above this level. Sustainable trading above 24,700 may open an upside move toward 25,000–25,200. However, failure to cross and hold above this level may result in continued volatility.

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). 

How Nifty Bank performed

On Friday, this major sectoral index opened on a muted note and turned volatile, taking cues from the RBI’s monetary policy outcome. Following the announcement, slight volatility pushed the index lower, resulting in a decline of 0.18%. The index opened at 53,634.20, traded in the range of 53,160.65–53,868.50, and closed at 53,509.50. Consequently, the index formed a bearish candle. However, its bullish momentum remains intact, as it continues to trade above all its key moving averages with a positive bias.

Also Read: Nifty’s next move: What Reliance and HDFC Bank are signalling

The momentum indicator, RSI, has flattened and is currently placed at 66, along with a positive crossover on MACD. Apart from RSI and MACD, another trend directional indicator, the average directional index (ADX), also suggests a strong bullish trend in this index.

The current ongoing trend in this sector suggests outperformance in the coming days. However, some short-term resistance around 54,000–54,500 cannot be denied.

According to O'Neil's methodology of market direction, the current market status is in a “Confirmed Uptrend." The uptrend begins with a follow-through day or when the index reclaims its previous uptrend high. 

Also Read: Mutual funds betting on these three capital-efficient infra stocks. What to know

Two stocks to buy, recommended by MarketSmith India:

Axis Bank Ltd: Current market price ₹ 1,184.55| Buy at ₹ 1,170–1,190| Profit goal ₹ 1,400| Stop loss ₹ 1,108| Timeframe 3–4 months

Railtel Corp. of India Ltd: Current market price ₹ 435.85| Buy at ₹425–440 | Profit goal ₹535 | Stop loss ₹ 398| Timeframe 3–4 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 taking any investment decisions.