The market momentum looked strong before the budget with the formation of a long bullish candlestick pattern on the daily charts with healthy volumes. Hence, the index is likely to face resistance at 21,800-21,900 levels on the higher side, while 21,500 may act as an initial support followed by 21,300 as a key support zone, experts said, adding that given it is the budget day, wild swings can't be ruled out.
On January 31, the Nifty 50 jumped 204 points to 21,726, and the BSE Sensex rallied more than 600 points to 71,752, while a major rally was seen in the broader markets, where the Nifty Midcap 100 and Smallcap 100 indices climbed 1.6 percent and 2.25 percent on healthy breadth.
Stocks that fared better than the broader markets as well as the benchmark indices included Exide Industries, Tata Motors, and UCO Bank. Exide Industries rallied more than 5 percent to Rs 335 and formed long bullish candlestick pattern on the daily charts with strong volumes, especially after several days of consolidation. The stock climbed above all key moving averages now (20, 50, 100 and 200-day EMA - exponential moving average), which is a positive sign.
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Tata Motors extended upward move for fifth consecutive session, and strong rally in the last three sessions with healthy volumes, while the stock continued higher highs, higher lows formation for four days in a row. The stock gained nearly 3 percent to end at record closing high of Rs 884 and traded above all key moving averages.
UCO Bank surpassed its previous swing high of September last year intraday and closed at Rs 46.50, the similar price of September 18 last year, up 6.3 percent after several months of consolidation. The stock formed bullish candlestick pattern with long upper shadow on the daily timeframe and traded above all key moving averages.
Here's what Jigar S Patel of Anand Rathi Shares & Stock Brokers recommends investors should do with these stocks when the market resumes trading today:
After making the top near Rs 342 on January 12, 2024, the said counter gave a decent correction until Rs 308. In the previous trading session, it bounced back from 21 DEMA (day exponential moving average) and took out its bearish trendline (refer to the chart), thus making it attractive at current levels.
On the indicator front, daily stochastics has given a positive crossover just around the oversold zone, which further confirms our bullish stance in the counter.
Thus, one can buy in the zone of Rs 330–336 with an upside target of Rs 365 and stop-loss would be placed on a daily closing basis around Rs 317.
Since the last 27 trading sessions, the said counter has been steadily consolidating near 21 DEMA and 50 DEMA. In the previous trading session, it took out its previous swing high of Rs 45 and is currently placed near the Rs 47 mark.
One can buy in the zone of Rs 45–47 for an upside target of Rs 55 and stop-loss would be placed near Rs 42 on a daily close basis.
At the current juncture, the said counter looks extremely overbought on a monthly scale. Also, the previous 3–4 months have exceptionally gone well. But one needs to be cautious at current levels because there are multiple Fibonacci ratio clusters present near Rs 900–950 zone, which would act as stiff resistance.
One should opt for profit booking in the mentioned zone and avoid fresh longs.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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