Nifty50 on 4 December
The Indian stock market’s benchmark index, Nifty50, extended its gaining momentum for four consecutive sessions. The index opened on a positive note and extended its intraday gain to 24,588. However, it faced resistance at a higher level around its 50-day moving average (DMA) and lost its entire intraday gain in a few minutes. Later, it traded like a roller coaster and formed a ‘doji’ candle with a higher-high and higher-low price structure on the daily chart.
On the sectoral front, strong buying emerged in banking, realty, IT, and media, which boosted market sentiment. Sectors like FMCG, auto, and energy dented the market sentiment. The advance-decline ratio was in favour of the bulls at around 3:2.
Technically, the index faced strong resistance around its 50-DMA, which is currently placed around 24,600. The momentum indicator, 14-period Relative Strength Index (RSI), turned flat and is currently placed around 56.
Another technical indicator, moving average convergence/divergence (MACD), is trending with a positive crossover but is still placed below the central line. Moving forward, the 50-DMA and 100-DMA are the key levels to watch in the coming days and are currently placed around 24,600 and 24,700, respectively.
The ongoing trend indicates that the bullish trend is likely to continue. However, the 50-DMA and 100-DMA may act as immediate resistance from a short-term perspective.
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).
Read more | Bank Nifty’s rebound: A signal for market outperformance?
How Nifty Bank performed
This major sectoral index opened on a positive note on Wednesday and remained traded in positive territory throughout the session. On Wednesday, the index formed a bullish candle with a higher-high and higher-low price structure. It is trending comfortably above all its key moving averages. The index opened at 52,775.00, traded in the range of 52,685.15–53,387.10, and closed at 53,266.90 with a positive bias.
The momentum indicator, RSI, is trending upward and is currently placed at 64, along with a positive crossover on MACD. Another trend directional indicator, the average directional index (ADX), also suggests a strong bullish trend in this index.
The combination of a sustained bullish trend along with improved momentum and relative strength within the sector indicates a continuation of outperformance in the coming days. From a technical perspective, this index is poised to retest an all-time high of 54,000–54,500 in the coming days.
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: Will 2025 belong to multi-cap, hybrid funds?
Two stocks to buy, recommended by MarketSmith India:
Macrotech Developers: Current market price ₹ 1,371.10 | Buy at ₹ 1,350–1,380 | Profit goal ₹ 1,555 | Stop loss ₹ 1,248 | Timeframe 1–2 months
Bank of Maharashtra: Current market price ₹ 58.92 | Buy at ₹57–59 | Profit goal ₹70 | Stop loss ₹ 52.90| 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.
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