Nifty50 on 26 December
Nifty50 has been hovering below its 200-day simple moving average (SMA/DMA), which is currently around 23,850, for the past four trading sessions and has faced strong resistance around it. Market action on Thursday formed another doji candle in a row below the 200-DMA. The index opened at 23,775, remained in the range of 23,855-23,653, and closed at 23,750 with a marginal gain of 0.10%.
The auto and pharma indices were the biggest gainers (0.92% and 0.83%, respectively), while the FMCG, metal and bank indices lost 0.10-0.30%. The advance-decline ratio inclined towards decliners and settled around 2:3.
The momentum indicator, 14-period Relative Strength Index (RSI), is trending in the flat zone with a negative bias and placed around 39 on the daily chart along with negative moving average convergence/divergence (MACD) crossover.
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According to the O’Neil methodology of market direction, the current market status is a “rally attempt”. A rally attempt begins the third day the index closes higher off the most recent bottom after being in a correction.
Overall market sentiment remains negative, with the index currently trading within 23,600-23,900. A breakout in either direction could lead the index to continue in that particular direction. On the upside, a move above 23,850-23,900 could drive the index towards 24,000–24,200. Conversely, a decline below 23,600 may trigger more downward movement.
How Nifty Bank performed
Bank nifty opened on a positive note and hit an intraday high of 51,740. The index faced resistance near its 100-DMA and formed a “high wave candlestick” pattern during Thursday’s trading session. The index has been hovering between its 100-DMA and 200-DMA over the past couple of days. It opened at 51,395.80, traded between 51,700 and 50,951.80, and closed at 51,170.70, losing around 0.12%.
The Relative Strength Index (RSI) has been moving sideways, currently positioned around 40, while the Moving Average Convergence Divergence (MACD) indicator remains in negative territory on the daily chart.
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According to O’Neil’s methodology of market direction, the index is in an “uptrend under pressure”. The total distribution day count remains at three. A distribution day is when the benchmark index or a major sectoral index falls 0.2% or more on higher volume than the previous day.
At this stage, the index is fluctuating between the 200-DMA and the 100-DMA, indicating a sideways movement. Immediate resistance is positioned in the range of 51,700–52,000, while strong support is placed around 50,500–50,400 as the 200-DMA is placed in this particular price range.
Stocks to buy, recommended by MarketSmith India:
- Craftsman Automation Ltd: Current market price ₹5,365.90 | Buy range ₹5,250–5,400 | Profit goal ₹6,270 | Stop loss ₹ 4,890 | Timeframe 2–3 months
- Ipca Laboratories Ltd: Current market price ₹1,594.40 | Buy range ₹ 1,560–1,600| Profit goal ₹1,850 | Stop loss ₹ 1,465| 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.
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