Nifty 50 on 8 January
The Nifty 50, India’s benchmark index, ended Wednesday’s volatile trading session nearly flat. Following cues from global markets, the index opened on a muted note and drifted lower, touching 23,500 in the first half. However, it staged a strong recovery from the day’s low to close at 23,688.95.
This rebound formed a bearish candle with a long lower shadow on the daily chart, indicating a strong bounce from the support level. Among sectoral indices, only Nifty IT and FMCG managed to stay in the green, while the rest closed lower. The advance-decline ratio was skewed toward decliners, settling at approximately 1:2.
From a technical perspective, the index struggled to sustain above its 200-day moving average (DMA). It tested a crucial support level today, defined by an upward-sloping trendline connecting the 21 November and 31 December 2024 lows. The 14-day relative strength index (RSI) is trending sideways at around 43 on the daily chart, while the moving average convergence/divergence (MACD) indicator remains in negative territory.
According to O’Neil’s methodology of market direction, Nifty gained more than 1.7% with higher volume on Thursday. We upgraded the market condition to a Confirmed uptrend. We may downgrade the status to an Uptrend Under Pressure if the distribution day count increases and Nifty breaches its key support level.
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Currently, the index has breached its 200-DMA and marginally traded above its key support level of 23,400. A fall below 23,400 may open a fresh downside window, pushing the index towards 23,000. On the flip side, it may face resistance at 24,000–24,200.
Nifty Bank performance
On Wednesday, Nifty Bank opened on a subdued note and remained in negative territory throughout a volatile trading session. The index formed a bearish candle with a long lower wick, reflecting a lower-high and lower-low price structure on the daily chart. It opened at 50,201.75, traded within a range of 50,246.90–49,389.75, and closed at 49,835.05.
From a technical perspective, the RSI has rebounded from oversold levels and is currently at 35, indicating some relief. However, the MACD indicator continues to trend in negative territory on the daily chart.
According to O’Neil’s market direction methodology, the market status has been shifted to a Downtrend, as it breached its 200-DMA. It is currently trending below all its key moving averages. Looking ahead, we will shift the market to a Rally Attempt if Nifty establishes a bottom and remains above its recent low for three consecutive sessions.
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At present, the index has breached its 200 DMA and is trending below it with a negative bias. Immediate support is placed around 49,500, and breaching this support may extend the downside toward 48,500–48,000. From now on, the 200-DMA is the key level to watch on the upside, placed around 50,700, which may act as a critical resistance level.
Stocks to buy, recommended by MarketSmith India:
● Reliance Industries Ltd: Current market price ₹ 1,265.50 | Buy range ₹ 1,250–1,270 | Profit goal ₹ 1,400 | Stop loss ₹ 1,192 | Timeframe 2–3 Months
● Zee Entertainment Enterprises Ltd: Current market price ₹ 133.77 | Buy range ₹ 128–135 | Profit goal ₹ 165 | Stop loss ₹ 118 | Timeframe 3–4 Months
