The Nifty50 seems to have entered into the consolidation mode with immediate support at 19,850, which has been held in last three sessions, though the index hit a historic high of 21,000 mark backed by banking and financial services and technology stocks on December 8. As long as this support gets a hold, the index may attempt for 21,100-21,500 levels, but a breach of the support can bring down the index towards 20,700-20,500 levels, experts said.
On December 8, the Nifty50 surged 68 points to 20,969 and formed a high-wave kind of candlestick pattern on the daily charts. The formation of such a pattern at the high generally indicates trend reversal but its formation took place in the consolidation period of last three sessions, hence the possibility of significance of this pattern seems to be less.
The BSE Sensex climbed more than 300 points to 69,826, however, the Nifty Midcap 100 and Smallcap 100 indices were under pressure, falling 0.2 percent and 1.1 percent.
Stocks that traded much better than benchmarks included GMR Airports Infrastructure, Indiabulls Real Estate, and Bharat Dynamics. GMR Airports Infrastructure surged 11.7 percent to Rs 68.90, the highest closing level since June 2009 and formed robust bullish candlestick pattern on the daily charts with significantly higher volumes. The stock has seen a decisive breakout of falling resistance trendline and traded above all key moving averages (20, 50 100 and 200-day EMA - exponential moving average), which is a positive sign.
Indiabulls Real Estate also saw a healthy breakout of downward sloping resistance trendline and jumped 9.6 percent to Rs 90 with robust volumes. The stock has formed strong bullish candlestick pattern on the daily scale and traded above all key moving averages.
Bharat Dynamics clocked 1.8 percent gains to end at record closing high of Rs 1,323 and formed bullish candlestick pattern with long upper shadow on the daily charts, indicating profit taking at higher levels. The stock traded way above all key moving averages and traded with healthy volumes.
Here's what Rajesh Palviya of Axis Securities recommends investors should do with these stocks when the market resumes trading today:
The stock had a strong 13 percent gain last week, breaking out decisively from its 'Rounded Bottom' pattern at Rs 66 levels, affirming the sustained bullish momentum in the medium term. The volume dried up during pattern formation but witnessed an increase in volume, indicating an influx of participation at the breakout.
The daily & weekly strength indicator RSI (relative strength index) is in a bullish mode and holding above its reference line indicating positive bias.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 75-79, with downside support zone of Rs 66-63 levels.
The stock has recently achieved a notable breakout above the "multiple resistance" zone at Rs 88 levels, accompanied by a significant uptick in volume, signaling increased participation at the breakout.
The stock is forming a higher high-low pattern on a weekly chart and holding above an upward-sloping trendline, indicating positive momentum.
The weekly strength indicator RSI given a crossover above its reference line generated a buy signal.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 99-105, with downside support zone of Rs 86-84 levels.
The stock experienced an 8 percent surge last week, marking a decisive breakout from its "consolidation zone" spanning Rs 1.250-970 levels. Bolstered by a strong bullish candle, this breakout signals bullish momentum. Additionally, the stock's ability to maintain levels above crucial moving averages (20, 50, 100, and 200 days simple moving average) underscores a robust and sustained uptrend.
Both the daily and weekly Relative Strength Indicator (RSI) are in a bullish mode and holding above their respective reference lines, indicating a positive bias.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 1,480-1,600, with downside support zone of Rs 1,260-1,230 levels.
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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