Stocks to buy: Two stock recommendations from MarketSmith India for 28 January
Source: Live Mint
Nifty 50 on 27 January: A recap
The Nifty 50, India’s benchmark index, extended its losing streak for a second consecutive session on Monday, 27 January, closing below 22,829.15. The index opened the day with a gap-down at 22,940 and remained range-bound between 22,786 and 23,007. The broad-based selloff was driven by uncertainty surrounding US trade policy and persistent selling by foreign institutional investors (FIIs). All major sectoral indices ended in the red, with the advance-decline ratio heavily tilted towards decliners, settling at approximately 1:10.
On the technical front, the index breached its 10-session consolidation range with the gap-down opening, closing below the key 23,000 mark—the lower boundary of the consolidation zone. The 14-day Relative Strength Index (RSI) continued its bearish trajectory, currently hovering around 34. Additionally, the Moving Average Convergence Divergence (MACD) indicator remains negative, trending below its central line.
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According to O’Neil’s methodology of market direction, today, we shifted the market status to a Downtrend, as Nifty breached its recent correction low of 22,976. Looking forward, we will shift the market to a Rally Attempt when Nifty closes in the green for the first time or closes in the upper half of the day’s range and stays above that low for three straight sessions. From there, we would prefer to see a follow-through day before shifting the market back to a Confirmed Uptrend.
The market sentiment has remained broadly negative over the past few weeks. On 27 January, the Nifty 50 index broke below the critical 23,000 mark and continued trading beneath it. A sustained move below 23,000 could trigger additional selling pressure in the days ahead, potentially dragging the index toward 22,000. Conversely, a decisive move above 23,000 could see the index remain range-bound within the 23,000–23,400 zone.
How Nifty Bank performed
The Nifty Bank index had opened with a gap-down and stayed in negative territory throughout the session. It formed another bearish candle on the daily chart, characterized by a lower-high and lower-low price structure, reflecting a negative bias. On 27 January, the index opened at 47,881.65, traded within the range of 48,319.20–47,844.15, and closed at 48,064.65.
From a technical perspective, the 14-day RSI is trending sideways, currently positioned around 35 on the daily chart. Meanwhile, the MACD indicator continues to trade below its central line with a negative crossover.
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According to O’Neil’s methodology of market direction, we downgraded the market status to an Uptrend Under Pressure as Nifty Bank breached its current support level of 48,300 with an elevation in distribution days. We may shift the market status to a Downtrend when the index breaches its recent correction low of 47,898.35.
The index is currently trending below all its key moving averages with a negative bias on the daily and weekly charts. The current market sentiment suggests that sustainable trading below 48,000 may drive the index toward 47,000 in the next few trading sessions. However, a bounce back cannot be denied from lower levels.
Stocks recommended by MarketSmith India:
● Torrent Pharmaceuticals Ltd: Current market price ₹ 3,337.75 | Buy range ₹ 3,250–3,350 | Profit goal ₹ 3,880 | Stop loss ₹ 3,068 | Timeframe 2–3 Months
Also read | This stock is up 2,700% since its IPO. Here’s why it’s ripe for a split
● ICICI Bank Ltd: Current market price ₹ 1,227.95 | Buy range ₹ 1,210–1,230 | Profit goal ₹1,330 | Stop loss ₹ 1,178 | 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.
