Some of the momentum indicators have given a sell signal on the daily charts which suggests that the trend is likely to remain slightly tilted towards the bears.
Nifty50 which hit a low of 8,806 on 18 May managed to bounce back but is still facing selling pressure around 9100 levels, data showed.
Some of the momentum indicators have given a sell signal on the daily charts which suggests that the trend is likely to remain slightly tilted towards the bears. If we look at the day for the last two sessions, bounce back on Nifty50 was quickly sold into.
The Nifty50 closed with gains of over 2 percent on May 20, but faced marginal selling pressure around 9100 levels.
Markets swung into action on additional stimulus hopes, but experts feel that for bulls to regain control, the Nifty50 has to hold onto 9000 levels. But, it is still buy on dips market as long as we hold 8800 levels.
"We managed to conquer the 9000 mark convincingly. And this is what we have been alluding since the last couple of days. We were a bit skeptical of the decline that we were seeing. Going ahead, we expect the Nifty to continue this upward trajectory towards 9150 – 9220 levels," Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking) told Moneycontrol.
"On the flip side, 9000 – 8932 would now provide decent support for the market. Traders can use intraday decline to create long positions on weekly expiry day," he said.
The Nifty is likely to trade in a range but stock specific moves are likely to continue, suggest experts. Investors should use the dip to buy into stocks that are showing signs of bottoming out.
We have collated a list of stocks from various experts that are showing signs of bottoming out:
Escorts in the Agri sector is forming a major bullish inverted head and shoulders pattern. Since its demand is rural, the company has a relative cushion from the pandemic, and the government focus on the farmer is likely to benefit the company.Bharti Airtel: Bharti Airtel from the telecom space has managed to hold its fort in the current fall as one of the sectors to see a rise in demand for services. It has seen major multi-year consolidation between 540-240 odd levels and currently trading at breakout levels.
Torrent Pharma swiftly managed to rally back to new all-time last month, but since then the stock has been range bound and consolidating its gains. If the stock holds above 2250, we expect the uptrend in the stock to continue.
Expert: Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking)
In the monthly chart of ICICI Bank, we can see a cluster of supports around 290-270 i.e. the confluence of 89-EMA and 61.8% retracement zone of the previous larger up move.
With recent price and volume move, INDIACEM fits perfectly in this category.
BHEL has started to show some encouraging signs, purely looking at the gargantuan volume activity in the recent past.Expert: Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas
Pharma is the one space that is likely to outperform going ahead. This sector has come out of a multiyear correction & is now set for a significant bull run. In fact, we have already seen the first leg of the rally in March.
The short term consolidation in the last 2-3 weeks is offering an opportunity to make a fresh entry on the long side. Cipla, and Sun Pharma are the counters from this space that are looking especially attractive.
Expert: Shitij Gandhi, Senior Technical Analyst at SMC Global Securities
The stock can be seen trading in a rising channel on the daily charts with the formation of the higher high and higher bottom. However, from the last few days, it has been consolidating between its 100 and 200 days exponential moving average that is placed at Rs 306 and Rs 323, respectively.
On the broader structure, the stock has formed an inverted head and shoulder pattern on the daily charts and is on the verge of fresh breakout above the neckline of the pattern formation. Additionally, the momentum indicators and oscillators are giving positive divergences on daily as well as weekly scales.
After taking support around Rs 485, the stock took a V-shape recovery and once again reclaimed a move above Rs 550 levels.
At the current juncture, the stock has formed an inverted head and shoulder pattern on the daily charts and has given a breakout with marginally higher volumes which points towards long build-up into the stocks.
Momentum oscillators suggest for the next upswing in the prices. Traders can accumulate the stock.
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