For the market, the 21,500 is expected to be a key zone on the Nifty 50, as per the technical and options parameters. The index is likely to take support at the same, in which case, the 21,600-21,700 level would be an immediate resistance area but, if the index breaks the same, the 21,400-21,300 level may be the levels to watch out for on the downside, experts said.
On January 3, the benchmark indices continued the downtrend for yet another session. The BSE Sensex was down 536 points at 71,357, and the Nifty 50 fell 149 points to 21,517, while the broader markets were mixed, despite the breadth was in favour of bulls. The Nifty Midcap 100 index gained third of a percent and the Smallcap 100 index ended flat with a negative bias.
Stocks that were among the gainers on the Nifty500 index included Biocon, Bandhan Bank, and Borosil Renewables. Biocon has seen a breakout of falling resistance trendline and closed above the previous swing high seen in September 2023. The stock jumped 6 percent to Rs 282.35, the highest closing level since December 2, 2022 and formed strong bullish candlestick pattern on the daily charts with robust volumes for yet another session.
Bandhan Bank has gained strength after consolidation in the recent past and went very close to the September swing high. The stock jumped 4.8 percent to Rs 253.90, the highet closing level since June 16, 2023 and formed healthy bullish candlestick pattern on the daily timeframe with significantly higher volumes.
Borosil Renewables rallied 8 percent to Rs 466 and closed above 200-day EMA (exponential moving average) for the first time since June 23 last year. With this, the stock traded above all key moving averages (20, 50, 100 and 200-day EMAs), which is a positive sign. The stock has formed robust bullish candlestick pattern on the daily charts with strong volumes.
Here's what Jigar S Patel of Anand Rathi Shares & Stock Brokers recommends investors should do with these stocks when the market resumes trading today:
Since last month, the said counter has been trading in the range of Rs 236-255. Recently, it has violated the 4-year-old bear trendline (refer to the chart), which is looking lucrative. On the indicator front, the weekly RSI (relative strength index) has made a hidden bullish divergence (refer to the chart), which further adds to the bullish stance.
Thus, we advised traders to go long in the range of Rs 245-255 with an upside target of Rs 290 and a stop-loss of Rs 230 on a daily close basis.
Note: HIDDEN BULLISH DIVERGENCE: A hidden bullish divergence is a setup where the oscillator forms progressively lower lows at the same time that the price is forming higher lows or same lows.
Since the year 2021 until February 2023, Biocon has nosedived from a high of Rs 487. At the current juncture, on a monthly scale, a bullish AB=CD pattern has emerged along with impulsive structure on RSI (refer to the chart) hidden bullish divergence, which is hinting towards bullish momentum in the coming months.
Recently, Biocon has reversed from its crucial support zone. Thus, we advise traders to go long in the stock in the range of Rs 275-285 with a stop-loss of Rs 249 for the upside target of Rs 340.
Note: Impulsive Structure is V-shaped formation near 30 levels of RSI.
Since the last 2–3 months, the counter has been making higher highs and higher lows, which is a sign of positive momentum in the counter. One can buy in the zone of Rs 455-470 for a target of Rs 530 and stop-loss would be Rs 425 on daily closing basis.
Disclaimer: The views and investment tips expressed by investment 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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