Nifty50 on 9 January
On Thursday, Nifty50, India’s benchmark index, closed lower in a weekly F&O expiry trading session. Taking cues from the global market, the index started on a muted note and continued to drift lower towards 23,500 to close near the day’s low at 23,526. As a result, it formed a bearish candle. Barring FMCG, all major sectoral indices closed lower. The advance-decline ratio leaned toward decliners and settled around a 1:3 ratio.
From a technical perspective, the index failed to hold above its 200-day moving average (DMA). Today, it tested its key support level, i.e., an upward-sloping trendline connecting the low of 21 November to that of 31 December 2024. The 14-day relative strength index (RSI) is trending downward around 40 on the daily chart, while the moving average convergence/divergence (MACD) indicator is still trending negative.
According to O’Neil’s methodology of market direction, Nifty gained more than 1.7% with higher volume last 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.
Currently, the index 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 further toward 23,000. On the flip side, the index may face resistance around 23,800–24,000.
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How Nifty Bank performed?
Bank Nifty remained in negative territory throughout the day. The index formed another bearish candle on the daily chart with a lower-high and lower-low price structure on the daily chart with a negative bias. Yesterday, the index opened at 49,712.55, traded in the range of 49,798.10–49,230.15, and closed at 49,503.50.
The momentum indicator, RSI, bounced from the oversold range, currently placed at 33. While the MACD remains in negative territory on the daily chart.
According to O’Neil’s methodology of market direction, the market status has been shifted to a ‘downtrend’. It has breached its 200-DMA and is currently trending below all its key moving averages. Looking forward, we will shift the market status to a rally attempt if Nifty establishes a bottom and stays above its recent low for three straight sessions.
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. Sustainable trading below this level may extend the downside toward 48,500–48,000. Moving forward, the 200-DMA is the key level to watch in the upside, placed around 50,700, which may act as a critical resistance level.
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Stocks to buy, recommended by MarketSmith India:
Marico Ltd.: Current market price ₹ 666.90| Buy range ₹ 646–670| Profit goal ₹ 800| Stop loss ₹ 608| Timeframe 2–3 months
Neogen Chemicals: Current market price ₹ 2,181 | Buy range ₹ 2,130–2,190| Profit goal ₹ 2,700| Stop loss ₹ 1,960| Timeframe 3–4 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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