Positive global cues, short covering and a bit of value buying in beaten down stocks helped the market snap a five-day losing streak on Tuesday. The index made a bullish candle on the daily charts, resembling a Piercing Pattern.
Piercing Pattern is generally called as a bullish reversal pattern. It occurs in a downtrend and is comprised of two candlesticks. The first candlestick is a long black candle, accompanied by high volume. The next candlestick makes a lower low, but then rallies to close above the midpoint of the first candlestick, but not above the opening of that candle. This pattern is one of the first signs that a potential bullish reversal is in play.
In a perfect piercing pattern, opening will be below previous day’s closing price and the close will be above the mid-point of previous sessions candle body but Tuesday’s opening was almost close to Monday’s closing price.
The Nifty50 after opening flat fell sharply and hit an intraday low of 10,882.85. It managed to recoup losses in morning trade itself amid volatility but slipped into red again in afternoon followed by sharp recovery in last hour of trade which helped the index climb above 11,000 levels to hit day's high of 11,080.60. The index closed 100.10 points higher at 11,067.50.
According to Pivot charts, the key support level is placed at 10,940, followed by 10,812.5. If the index starts moving upwards, key resistance levels to watch out are 11,137.8 and 11,208.1.
The Nifty Bank index closed at 25,330.35, up 360 points on Tuesday. The important Pivot level, which will act as crucial support for the index, is placed at 24,870.04, followed by 24,409.77. On the upside, key resistance levels are placed at 25,598.74, followed by 25,867.17.
Here are the top stock trading ideas which can give good returns in the near term:
Shitij Gandhi of SMC Global Securities
Buy Bajaj Corp with target at Rs 485 and stop loss at Rs 415
Buy Deepak Nitrite with target at Rs 315 and stop loss at Rs 252
Buy United Breweries with target at Rs 1525 and stop loss at Rs 1260
Rajesh Agarwal of AUM Capital
Buy Adani Enterprises with stop loss at Rs 133 and target of Rs 147
Buy State Bank of India with stop loss at Rs 265 and target of Rs 279
Buy JSW Steel with stop loss at Rs 397 and target of Rs 414
Buy Dhampur Sugar with stop loss at Rs 140 and target of Rs 158
Buy Albert David with stop loss at Rs 598 and target of Rs 650
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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