Stocks to buy: Two stock recommendations from MarketSmith India for December 26

Nifty 50 on December 24

Nifty 50, India’s benchmark stock market index, hovered around its 200 exponential moving average (EMA) and formed an “intra-range doji candle” on Tuesday, December 24. The index opened at 23,769, traded in a range of 23,867–23,709 and closed at 23,728, marking a loss of 0.11% from its previous close.

Sectorally, the Auto and FMCG indices posted gains of 0.57% and 0.54% respectively, while the Metal, IT, Realty and Energy sectors lost between 0.1% and 0.50%. The advance-decline ratio remained almost constant at around 1:1.

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Technically, the index has been hovering around the 200-EMA in the last two trading sessions. The momentum indicator, the 14-period Relative Strength Index (RSI), is showing a negative bias and has flattened around the 38 level on the daily chart. This is accompanied by a negative moving average convergence/divergence (MACD) crossover.

According to the O’Neil methodology of market direction, the current state of the market is in a “Rally Attempt.” A rally attempt begins on the third day after the index closes above the most recent low following a period of correction or downtrend.

Overall market sentiment remains negative, with the index trading in a tight range of 23,600–23,900. A breakout in either direction could determine the next trend. On the upside, a move above 23,900 could push the index towards the 24,000–24,200 range. On the downside, a drop below 23,600 may trigger another downward move.

The performance of the index in the coming sessions will depend on whether it can decisively break out of this range.

Nifty Bank Performance

The Bank Nifty index on Tuesday saw a gap open on muted notes and traded sideways through the session. Today’s market action has formed a “red doji” candle, with the index oscillating between the 100-DMA and 200-DMA in recent days. It opened at 51,314.95, traded in a range of 51,382.10–51,137.50 and closed at 51,233.23. marking a loss of 0.16%.

The Relative Strength Index (RSI) has moved sideways, currently standing around 41, while the Moving Average Convergence Divergence (MACD) remains in negative territory on the daily chart.

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According to O’Neil’s market direction methodology, the index is in an “Uptrend under pressure”. Currently, the total number of distribution days remains at three. A breakout day means a day on which the benchmark or a major sector index fell by 0.2% or more on higher volume than the previous day.

At this stage, the index fluctuates between the 200-DMA and the 100-DMA, indicating sideways movement. Immediate resistance is positioned in the range of 51,700–51,900, while support is placed at 50,400–50,300.

MarketSmith India Recommended Stocks to Buy:

● Krishna Institute of Medical Sciences: Current market price ₹ 599 | Buy at ₹ 585–605 | Profit motive ₹692 | Stop the loss ₹ 565 | Time frame: 2-3 months

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● Granules India Ltd: Current market price ₹ 596.85 | Buy at ₹ 580–600 | Profit motive ₹675 | Stop the loss ₹ 557 | Term 2-3 months

Disclaimer: The opinions and recommendations presented in this article are those of the individual analysts. These do not represent the views of Mint. We advise investors to consult certified experts before making any investment decisions.