Nifty 50 on 28 November
The Nifty 50, the Indian stock market’s benchmark index, fell around 360 points on Thursday, dragged by IT, banking, auto stocks, and Reliance Industries. The index started the session on a muted note at 24,274.15 points and continued to trade sideways for the initial hour of the session. However, the index dragged lower after a decline in IT stocks due to the U.S. inflation data, which signaled a slower-than-expected rate cut. As a result, the index formed a bearish candle with a lower-high and lower-low price structure on the daily chart and closed at 23,914.
Technically, Nifty 50 took strong resistance around 24,350 for the past four trading sessions. Today, it failed to hold above 21-day moving average (DMA), which was placed near 24,000. The momentum indicator 14-period Relative Strength Index (RSI) has turned downward and is currently placed at 45. Another technical indicator, moving average convergence/divergence (MACD), is trending with a positive crossover, but it is still placed below the central line.
As the index failed to hold above 24,000 (i.e., 21-DMA), the next leg of immediate support is placed around 23,700. However, from today, the index must cross above 24,350–24,450 to turn its sentiment from negative to positive.
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
This major sectoral index opened on a positive note and tried to be in positive territory on Thursday. However as the day progressed, fluctuation and volatility were visible in the index. This has put the index downward and closes on a negative note. Nifty Bank opened at 52,389.95 and traded in the range of 52,760.2–51,782.9 and closed at 51,906.85. It formed a bearish candle with an upper wick in Thursday’s trading session, indicating resistance at higher levels. The momentum indicator RSI has bent slightly downward and is currently placed near 54, along with a positive crossover on MACD. The index retested its 21 DMA (i.e. 51,888.42) and managed to close above it. It may remain traded volatile and choppy unless it is trading below 52,500. To turn the index bullish, it must cross and hold above 52,500.
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.
Two stocks to buy, recommended by MarketSmith India:
ITI: Current market price ₹295.65 | Buy at ₹287–297 | Profit goal ₹364 | Stop loss ₹268 | Timeframe 2–3 months
Bajaj HFL: Current market price ₹136.80 | Buy at ₹132–137 | Profit goal ₹170 | Stop loss ₹124 | 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 taking any investment decisions.
