Markets
Stocks to buy: Two stock recommendations from MarketSmith India for today-15 January
Summary
- Here are the two stock recommendations from MarketSmith India for Wednesday, 15 January.
Nifty50 on 14 January
Benchmark equity index Nifty50 snapped four consecutive sessions of losses and gained around 0.39% on Tuesday. The index took cues from the global market and started the session with a gap-up opening of 23,165.90. It continued to trade within a range of 23,134–23,264 and closed above 23,200. As a result, the index formed a doji candle, indicating a tough fight between buyers and sellers. Barring IT and FMCG, all major sectoral indices closed higher. The advance-decline ratio was in favour of advancers and settled around 4:1.
From a technical perspective, Nifty is still trading below all its key moving averages and key technical support levels. The 14-day relative strength index (RSI) bounced from an overbought level and is currently positioned around 35 on the daily chart, while the moving average convergence/divergence (MACD) indicator is still trending negative.
According to O'Neil's methodology of market direction, we changed the market status to a downtrend as Nifty has breached its recent correction low of 23,256. Stocks continued to decline, with many moving deeper into their respective bases and breaking below their logical support levels. Looking forward, we will shift the market to a rally attempt when Nifty closes in the green for the first time or in the upper half of the day's range and remains above that low for three straight sessions. From there, we would prefer a follow-through day before shifting the market back to a ‘confirmed uptrend’.
Currently, the index has breached its 200-DMA on the daily chart and 50-WMA on the weekly chart with a negative bias. The overall market sentiment is negative, as the immediate support of 23,000 is a key level to watch. Further, short-term technical indicators are showing an oversold scenario. Hence, a bounce back toward the 200-EMA, i.e., 23,700, cannot be denied. However, a fall below 23,000 may move toward 22,800–22,700.
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How Nifty Bank performed?
Nifty Bank, opened with a gap-up of 226 points higher on Monday and traded in positive territory throughout the day. After four consecutive days of decline, the index formed a bullish candle with a higher-high and higher-low price structure on the daily chart. Yesterday, it opened at 48,266.90 and traded within the range of 49,007.35–48,235.20, closing at 48,729.15.
The momentum indicator, RSI, is trending downward, currently placed at 33, while the MACD remains in negative territory on the daily chart.
According to O'Neil's methodology market direction, the market status has been shifted to a downtrend. It has breached its 200-DMA and is currently trending below all its key moving averages with a negative bias. Looking ahead, the shift may be to a rally attempt if Nifty establishes a bottom and stays above its recent low for three straight sessions.
The index is currently trending below its 200-DMA with a negative bias. However, it registered a bounce of 687.90 points (+1.43%) yesterday. If this upward movement continues, the index may retest 49,500–50,000 in the coming days. On the other hand, falling below 47,898, which was the recent low recorded on Monday, may turn more negative toward 47,000.
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Stocks to buy, recommended by MarketSmith India:
Biocon: Current market price ₹ 387.65| Buy range ₹ 375–390| Profit goal ₹ 458| Stop loss ₹ 350| Timeframe 2–3 Months
Bajaj Finance: Current market price ₹ 7,335 | Buy range ₹7,100–7,375| Profit goal ₹ 8,300| Stop loss ₹ 6,870| 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 making any investment decisions.
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