The market has fallen 4 percent in the last four sessions and hit a fresh five-month closing low on March 14, but experts feel it seems to be looking oversold with momentum indicator RSI (relative strength index) at 32 levels and the Nifty and RSI structure on daily charts seem to be showing a bullish divergence, indicating the possibility of a rebound.
The BSE Sensex fell more than 300 points to 57,900, while the Nifty50 declined more than 100 points to 17,043, the lowest closing level since October 13, and formed a bearish candle on the daily charts.
The broader markets also traded lower with the Nifty Midcap 100 and Smallcap 100 indices falling half a percent and eight-tenth of a percent, respectively.
Stocks that performed better than broader markets included EIH, which climbed 4 percent to Rs 168.4 and formed a bullish engulfing pattern on the daily charts with above-average volumes, indicating the possibility of further upside in coming sessions. The stock got back above 200 DMA as well as 200 EMA with Tuesday's rally.
Mahindra CIE Automotive was also in focus, rising 3 percent to Rs 371 and formed bullish candle on the daily charts with long upper and lower shadows indicating a bit of volatility in the counter. The stock traded with above average volumes while taking support at Rs 355 levels.
NMDC has also formed bullish candle with long upper shadow on the daily scale, indicating a bit of profit booking at higher levels. The stock closed with 1.7 percent gains at Rs 116.4, with above average volumes. It has been making higher highs higher lows formation for second consecutive session.
Here's what Vaishali Parekh of Prabhudas Lilladher recommends investors should do with these stocks when the market resumes trading today:
The stock has maintained support base near Rs 155 zone where on thrice occasion it has recovered from those levels and indicated a pullback.
Currently the stock moving above the 200-DMA (days moving average) and 50-day EMA (exponential moving average) levels of Rs 164 and Rs 167 levels respectively has shown strength in this weak market and is anticipated to carry on the momentum further till Rs 178 levels for the near term perspective.
The RSI (relative strength index) indicator is well placed and is on the rise to show strength and has upside potential from here on.
The stock has been in a strong trend in the past 6-7 months and recently with a short correction witnessed from the peak zone of Rs 462 levels has shown signs of bottoming out and picking up to improve the bias to carry on the postive move till further upside.
The RSI has indicated a reversal from near the oversold zone and has immense upside potential from here on. One can keep the support base near Rs 350 zone and accumulate for further gains with further target expected near Rs 430-450 levels.
The stock has witnessed a decent correction from Rs 131 levels to bottom out near Rs 110 zone and indicated a pullback to recover from the selling activity and with improvement in the bias, it is anticipated to carry on the positive move till further upside.
The RSI indicator has been gradually picking up with strength indicated and has further much upside potential in the near future. One can accumulate the stock for further target of Rs 122 and thereafter Rs 127 in the coming days.
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