It was yet another session of volatility and rangebound movement in the market on January 31, as participants cautiously awaited the Union Budget.
The recovery in late trade helped the benchmark indices close slightly higher, but the performance presented by broader markets was quite strong with the Nifty Midcap 100 and Smallcap 100 indices rising 1.6 percent and 2.9 percent on strong breadth.
About three shares advanced for every falling share on the NSE.
The BSE Sensex gained 50 points to 59,550, while the Nifty50 advanced 13 points to 17,662 and formed bearish candle on the daily charts with long lower shadow indicating support-based buying.
Volatility also cooled down ahead of the key event, falling 4.71 percent to end at the 16.88 level, though it crossed 18 level in an intraday trade, giving a bit of support to the market.
The buying in auto, metal, and bank stocks helped the Nifty50 defend the crucial support level of 17,550, but the selling in technology, pharma and oil and gas stocks dragged the index away from the resistance area of 17,700-17,750.
Stocks that were in action and outperformed the broader markets included Rashtriya Chemicals and Fertilisers which jumped 7 percent to Rs 121 and formed strong bullish candle on the daily charts with above-average volumes. Also there was a Morning Star kind of pattern formation if we see the performance of last three days, by taking support at an upward sloping support trendline adjoining multiple lows from June 2022 to December 2022.
Chambal Fertilisers and Chemicals was also in focus, climbing 8 percent to close at 100 DEMA (daily exponential moving average) of Rs 313 and formed robust bullish candlestick pattern on the daily charts with healthy volumes, recouping losses of last several sessions in a single day rally. It closed above 50 DEMA as well as 9 and 21 DEMA with a single day run.
Bharat Electronics shares rallied nearly 7 percent to Rs 95 and recouped all its previous day's losses. The stock has formed long bullish candle on the daily charts with significantly higher volumes, closing tad above 200 DEMA as well as 200 DMA.
Here's what Vaishali Parekh of Prabhudas Lilladher recommends investors should do with these stocks when the market resumes trading today:
Rashtriya Chemicals and Fertilisers
The stock has bottomed out near the long term trendline support zone of Rs 110 level and indicated a pullback to improve the bias. It is just above to move past the significant 50 DEMA level of Rs 121 zone with RSI (relative strength index) also showing a trend reversal from the oversold zone to signal a buy.
Investor can buy and accumulate for further target price of Rs 136 for the near term and around Rs 150 levels for the shorter term time frame keeping a stop-loss near Rs 110 level.
The stock has witnessed a decent erosion in the last one week correcting from Rs 104 level to show signs of bottoming out near Rs 87 zone and indicating a pullback to move past the important 200DMA level of Rs 94 zone and improve the bias.
Further the upside movement is anticipated with the trend getting better with the RSI indicating a decent prominent reversal pattern from the highly oversold zone and signalling a buy.
One can buy and accumulate the stock for an upside initial target of Rs 103 level and further strength can carry it to Rs 110 level.
Chambal Fertilisers and Chemicals
The stock after the short correction has bottomed out near Rs 287 zone and indicated a decent pullback with a big bullish candle pattern on the daily chart to improve the bias. It is moving past the significant 50EMA level of Rs 306 zone anticipating for further upward move in the coming sessions.
Further rise above the important 200DMA level of Rs 332 would further strengthen the trend and can carry on the momentum still further upside for fresh new targets.
One can buy the stock for initial target of Rs 332 and further upside can be expected at Rs 365 in the longer term time frame. The levels near Rs 280 would be the major support zone for the stock.
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