Markets
Stocks to buy: Two stock recommendations from MarketSmith India for 3 January
Summary
- Here are the two stock recommendations from MarketSmith India for Friday, 3 January.
Nifty50 on January 2, 2024
Nifty50 reclaimed 24,150 on the weekly F&O expiry sessions and gained around 446 points on Thursday. The index started the session on a muted note at 23,783. As the day progressed, it drew buying interest and closed near the day’s high at 24,188.
The rally extended across sectors, with significant interest in auto, IT and BFSI stocks, driven by strong business updates and earnings optimism for Q3FY25. The broader market delivered a strong performance, with the advance-decline ratio favouring advancing stocks and settling at 2:1.
Also read: A sombre December manufacturing PMI curbs enthusiasm
From a technical perspective, the index reclaimed its 50- and 200-day moving average (DMA) in a single move. The 14-day relative strength index (RSI) is trending upward, positioned around 52 on the daily chart, while the moving average convergence/divergence (MACD) indicator is on the verge of a positive crossover.
According to O'Neil's methodology of market direction, Nifty staged a follow-through day as it advanced more than 1.5% on higher volume than the previous day. Hence, we are upgrading the market status to “confirmed uptrend".
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The index reclaimed its 200-DMA and the psychologically important 24,000 level. Sustainable trading above this is likely to drive the index toward 24,450–24,500, followed by 24,800 in the coming sessions. But failure to hold above 24,000–23,900 may push the index to a broader range of 23,400–24,000.
How Nifty Bank performed
Nifty Bank opened on a positive note and traded in a volatile manner in the first hour. Later, the index saw buying interest at lower levels, which helped it to close on a higher note. The index formed a bullish candle with a higher-high and higher-low price structure on the daily chart. It opened at 50,084.95, traded within 51,672.75–50,992.80, and closed at 51,605.55 after gaining 555 points or 1.07%.
The RSI has slightly edged upward to 48, while 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". The distribution day count stands at three. A distribution day occurs when the benchmark index or a major sectoral index declines 0.2% or more on higher volume than the previous day.
The index has been oscillating between its 200- and 100-DMA since 19 December, indicating a sideways move. Immediate resistance is positioned in the 51,800–52,300 range, while strong support lies between 50,600 and 50,500, with the 200-DMA in this price range.
Stocks to buy, recommended by MarketSmith India:
- Bajaj Finance Ltd: Current market price ₹7,389.20 | Buy range ₹7,200–7,400 | Profit goal ₹8,200 | Stop loss ₹6,780| Timeframe 2–3 months
- Trent Ltd: Current market price ₹7,321 | Buy range ₹7,150–7,350 | Profit goal ₹8,290 | Stop loss ₹6,800 | 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.
