Indian market hit over 4-month high on July 23, but analysts are not convinced about the up move. Tracking positive global cues, the S&P BSE Sensex reclaimed 38,000 while Nifty50 climbed 11,200 levels on a closing basis.
Traders are advised to either taper down their long positions or book partial profits or buy again at lower levels. Now, a close above 11,238 on Nifty is required for bulls to retain a dominant position.
Dilip Buildcon, Natco Pharma, Dixon Technologies, SBI and RIL were some of the stocks that were in focus on July 23.
We have collated views of experts on what investors should do when the market resumes trading:
Expert: Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities
Dilip Buildcon: 280 should be the trend decider level
Post quick pullback rally from 190 to 285, the stock was witnessing a narrow range activity. However, on the daily charts, the stock has formed a higher bottom series pattern along with positive SAR series which indicates uptrend is likely to continue in the near-term.
In addition, on a daily as well as weekly charts, the stock has formed a strong bullish candle which indicates high chances of medium-term uptrend wave from the current levels.
In the short run, 280 should be the trend decider level, and if the stock manages to trade above the same then we can expect uptrend continuation wave up to 350-365.
Natco Pharma: Traders should watch out for 700 and 680
The stock has rallied nearly 15 percent so far in the month of July. On July 23, Natco Pharma made a fresh 52-weeks high of 738.80 and after a sharp intraday price surge, the stock closed above 700 resistance mark, which is broadly positive.
The important thing is volume activity. The incremental volume activity post-breakout clearly indicates high chances of the further uptrend from current levels.
On the daily as well as weekly charts, the stock has formed a strong promising price volume breakout formation that indicates bulls are clearly dominating the price action.
For the breakout, traders should watch out for 700 and 680. The overall chart structure suggests that if the stock sustains above the same, then the breakout continuation texture is likely to continue up to 800.
Dixon Technologies: Rs 7000 is likely to be the trend decider level for the bulls
On July 23, the stock made another all-time high of 7777. In this month alone, the stock has rallied by about 35 percent. The important point is stock not only surpassed its previous 52-week high of 5575 but comfortably managed sustained above the same.
The V-shape uptrend rally surprised most traders. On the daily as well as weekly charts, the stock has formed a breakout continuation pattern which is grossly positive for the Dixon Technologies.
However, on the short-term time frame, momentum indicators indicate that the stock is in an overbought zone and high chances of quick short-term price correction are not ruled out if stock trades below 7000.
For the next few trading session, 7000 should be the trend decider level for the bulls, and if it sustains above the same, we can expect a continuation of the uptrend towards 8500.
Further uptrend may also continue which could lift the stock towards 9100, and on the flip side, dismissal of 7000 could possibly trigger quick short-term correction up to 6265. SBI: 180 should act as an important support level
After a strong pullback rally from 151 to 195, the stock is hovering in the range of 180 to 200. However, on the daily and weekly charts, the stock has formed a strong higher bottom series formation.
The stock is consistently making a higher bottom series pattern which is broadly positive for the SBI.
Another important thing is that the stock is trading well above medium-term averages along with strong positive SAR series on the weekly charts, which suggest high chances of an uptrend is not ruled out.
For the positional traders, 180 should act as an important support level. And, if the stock manages to trade above the same, we can expect one more short-term uptrend wave up to 220.
RIL: 1980 should be the sacrosanct support level for the swing traders
On July 23, the stock made another all-time high of 2079.70. This month, the stock rallied over 20 percent. The V-shaped strong reversal rally from 900 to 2000 surprised traders as well as investors.
On Thursday, RIL not only crossed 2000 psychological mark but interestingly, it registered over Rs 13 lakh cr market capitalization.
The strong price volume activity and persistence positive news flow may have helped the bulls to maintain positive stance in the short term.
The medium-term texture of Reliance Industries is very positive and is likely to continue. However, in the short run, the stock is in an overbought zone and momentum indicators suggest high chances of profit booking below 1980.
For the next few trading sessions, 1980 should be the sacrosanct support level for the swing traders, and above the same, we can expect a breakout continuation pattern up to 2150-2220.
On the flip side, dismissal of 1980 possibly trigger quick short term correction up to 1850-1800. As we mentioned the larger trend is fairly positive, so any meaningful correction should be the opportunity for the investor to add long positions near important support levels.
Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
The views and investment tips expressed by 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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