Indian market rose for the fifth consecutive day in a row on Thursday pushing headliner index Nifty beyond 11,600 on an intraday basis. The recent price action suggests that the momentum seems to be fading at higher levels.
Let’s look at the final tally on D-Street on Thursday – the S&P BSE Sensex rose 39 points to 39,113 while the Nifty50 closed 9 points higher at 11,559.
Sectorally, the action was seen in Realty, Bankex, Finance, and Consumer Durable space while profit-taking was visible in Energy, Oil & Gas, Utilities, and Telecom.
Stocks that were in focus include Godfrey Phillips which rose over 8 percent, Tata Motors (up 5 percent), and Tata Elxsi (up 4.7 percent).
We have collated views of experts on what investors should do when the market resumes trading on Friday, 28 August:
Expert: Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities
After a strong uptrend rally from Rs 915 to 1,065, the stock was hovering in the range of Rs 900 to 985. However, on Thursday, the stock opened with a gap on the upside of nearly 10 percent but failed to close above Rs 1,065 resistance.
A strong gap-up opening followed by incremental volume activity suggests that the positive momentum is likely to continue in the near-term.
However, technically we shall get a breakout confirmation only if the stock manages to close above Rs 1,065.
Currently, the stock is witnessing a non-directional activity. It looks like traders are waiting for a breakout confirmation.For the bulls, Rs 1,065 would be the important breakout level to watch. And if the stock manages to close above the same, we can expect a quick uptrend rally towards Rs 1,200. On the flip side, a close below Rs 1,000 may take the stock to Rs 950 levels.
In this month alone, Tata motors rallied near 40 percent. On Aug 27, the stock continued positive momentum and after a strong and volatile intraday session, the stock closed above Rs 140.
The important thing is volume activity. The incremental volume activity post 200-Day SMA breakout clearly indicates a high chance of a further uptrend from current levels.
On the daily and weekly charts, the stock has formed a strong promising price volume breakout continuation formation that suggests bulls are clearly dominating the price action.
For a breakout, Rs 135 and Rs 129 should be the key levels to watch, and the overall chart structure suggests that if the stock sustains above the same then a breakout continuation formation is likely to continue up to Rs 155.
On Aug 27, the stock registered a fresh 52-weeks high of Rs 1,208.60. In this month alone, the stock has rallied by nearly 20 percent.
The important point is that the stock has not only surpassed its previous resistance of Rs 1,075 but comfortably managed to sustain above the same.
The V-shaped uptrend rally surprised most of the traders. On the daily and weekly charts, the stock has formed a breakout continuation pattern which is grossly positive for Tata Elxi.
However, on the short-term time frame, the momentum indicators indicate that the stock is in an overbought zone and there are high chances of a quick short-term price correction which cannot be ruled out if the stock trades below Rs 1,075.
For the next few trading sessions, Rs 1,075 should be the trend decider level for the bulls, and if the stock sustains above this level then we can expect a continuation of the uptrend up to Rs 1,250.
Further, the uptrend may also continue which could take the stock towards Rs 1,300. On the flip side, dismissal of Rs 1,075 could possibly trigger quick short-term correction up to Rs 990.Disclaimer: 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.