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Sectoral performance was broadly positive with all indices closing higher except Nifty Auto, which fell 0.14%. The main gainers were Nifty Realty, Bank Nifty, FMCG, Metal and Energy, which closed in the range of 0.70-1.50 per cent. However, the advance-to-decline ratio tilted in favor of the decliners, standing at approximately 2:3.

Technically, the index found support near its 200-day EMA and rebounded on Monday, but it remains vulnerable. The momentum indicator, the 14-period relative strength index (RSI), is positioned between 38 and 39 on the daily charts, with a negative moving average convergence/divergence (MACD) crossover.

According to O’Neil’s market guidance methodology, the market is currently in an “attempted rally.” This phase begins on the third day when the index closes higher from the most recent low after being in a correction (or downtrend).

Although overall market sentiment remains bearish, a near-term rebound towards the 24,000 to 24,200 levels is possible. However, if the index continues to fall below its 200-day EMA, this could trigger a further downward move, potentially targeting 23,200 in the coming days.

Performance of Nifty Bank

Nifty Bank opened with a higher gap on Monday and remained in positive territory throughout the session. The index formed a bullish candle, bouncing near its 200-day moving average (DMA). The index had opened at 51,044.40, traded in a range of 51,417.35 to 51,030.40 and closed higher at 51,317.60.

The technical indicator, RSI, has increased slightly and is currently around 41, with a negative crossover on the Moving Average Convergence/Divergence (MACD) on the daily chart.

According to O’Neil’s market guidance methodology, the index is in a “pressurized uptrend.” Currently, the total number of distribution days remains at three. A distribution day occurs when the benchmark or a major sector index falls by 0.2% or more. at a higher volume than the day before.

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Currently, the rebound to 52,000 cannot be denied. However, at the same time, investors should be careful and closely monitor the 200-DMA, which is located near 50,500, as breaching this level could open a new bearish window.

Two stocks to buy, recommended by MarketSmith India:

● Avanti Feed Ltd.: Current market price ₹ 655.60 | Buy from ₹ 640-660 | Profit target ₹770 | Stop the loss ₹ 578 | Deadline 2 to 3 months

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● Aster DM Healthcare: Current market price ₹ 503.85 | Buy from ₹ 490-505| Profit target ₹650 | Stop the loss ₹ 460| Lead time 3-4 months

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