Stocks to buy: Two stock recommendations from MarketSmith India for 6 December
Source: Live Mint
Nifty 50 on 5 December
Nifty 50, India’s benchmark stock market index, sustained its positive momentum for the fifth consecutive session. On 5 December, Thursday, the index opened with a gap-up and formed a bullish candle on the charts. While it faced initial selling pressure, strong buying in sectors like IT, banking, and heavyweight Reliance Industries Ltd pushed it to an intraday high of 24,857 before closing at 24,708.
Notably, Nifty 50 reclaimed both its 50- and 100-day moving averages (DMA), with nearly all sectoral indices ending in the green except for Nifty Realty, which slipped 0.25%. The advance-decline ratio favoured the bulls, settling above 1:1.
Read this | Nifty’s next move: What Reliance and HDFC Bank are signalling
The index retraced 50% of its recent decline and is now hovering near its 100-DMA at around 24,700, which may act as a crucial level in today’s trading session. The momentum indicator, the 14-period Relative Strength Index (RSI), continued its upward trend and is currently positioned around 60, signalling strengthening momentum.
Additionally, the Moving Average Convergence Divergence (MACD) indicator is trending with a positive crossover and currently holds above the central line, signalling bullish momentum.
The prevailing trend suggests that bullish sentiment is likely to persist. A sustained move above 24,700 could propel the index toward the 25,000–25,200 range in the coming days.
According to O’Neil’s methodology for market direction, the current market status is classified as a “rally attempt.” This phase begins on the third day after the index closes higher than its recent bottom, following a period of correction (also referred to as a downtrend).
Performance of Nifty Bank
The major sectoral index opened on a positive note on Thursday, navigating volatility driven by weekly F&O expiry and anticipation of the MPC outcome due today. Despite the fluctuations, the index formed a bullish candle with a higher-high and higher-low structure, trading comfortably above all key moving averages.
After opening at 53,354.45, the index turned volatile, dipping to an intraday low of 52,850. However, robust buying in leading private sector banks during the afternoon session propelled it to an intraday high of 53,888. The index eventually pared some gains, closing at 53,603.55.
The momentum indicator RSI is trending upward and is currently at 66, signalling strong bullish momentum. Additionally, the MACD shows a positive crossover, while the Average Directional Index (ADX), a trend strength indicator, reinforces the bullish outlook for the index.
Also read | ‘SIP flows healthy but investors more watchful after pullback’
Today’s session will centre on the Reserve Bank of India’s (RBI) policy decision, with markets closely watching for a potential rate cut. The Q2 GDP data and prevailing inflation trends have placed the RBI in a delicate position. While the central bank is expected to maintain an accommodative stance in this meeting, a rate cut may be deferred. If a cut doesn’t materialize today, a 25-bps reduction is anticipated in the February policy meeting.
Two stocks to buy, recommended by MarketSmith India:
Shyam Metalics And Energy: Current market price ₹ 845.10 | Buy at ₹ 835–850| Profit goal ₹ 990| Stop loss ₹ 797| Timeframe 2–3 Months
Pitti Engineering: Current market price ₹ 1,435 | Buy at ₹1,420–1,450 | Profit goal ₹1,630 | Stop loss ₹ 1,350 | Timeframe 1–2 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 taking any investment decisions.
