With the momentum strengthening ahead of expiry of November derivative contracts and the formation of a long bullish candlestick pattern on the daily charts with positive momentum indicator, the Nifty50 is likely to sustain its uptrend as it aims for a record high of 20,222.45, with support at 20,000-19,800, experts said.
On November 29, the Nifty50 spiked more than 200 points or 1 percent to 20,097, the highest closing level since September 18 this year, while the BSE Sensex jumped over 700 points to 66,902, driven by banking and financial services, technology and auto stocks.
The broader markets also gained momentum, with the Nifty Midcap 100 and Smallcap 100 indices rising 0.8 percent and 1 percent, but the market breadth was equal and the volatility expanded for third straight session.
Stocks that participated in the market run-up and fared better than the broader markets included Graphite India, Jubilant Foodworks, and Praj Industries. Graphite India rallied nearly 6 percent to Rs 502 on the NSE and formed long bullish candlestick pattern with upper shadow on the daily timeframe after breaking out falling resistance trendline with robust volumes and consolidation. The stock traded above all key moving averages (20, 50, 100 and 200-day EMA - exponential moving averages).
Jubilant Foodworks advanced in last four out of five consecutive sessions with healthy volumes and jumped 3.4 percent to Rs 563. The stock has formed long bullish candlestick pattern on the daily charts. It has seen a breakout of downward sloping resistance trendline October 6 last year and September 28 this year on Monday with bullish candlestick pattern, followed by consolidation on Tuesday with Doji candlestick pattern.
Praj Industries rose 2 percent to end at record closing high of Rs 634 and formed bullish candlestick pattern with upper and lower shadows on the daily charts, with above average volumes. The stock traded above all key moving averages, with higher highs, higher lows formation.
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:
At the current juncture, the said counter has given a breakout after consolidating for some sessions, and it has also violated its downward-sloping trendline (refer to the chart).
Having said that, price action is sustaining above all major exponential averages, which is a sign of bullishness. On the indicator front, the daily RSI (relative strength index) has taken out its previous swing high, along with the daily DMI’s (directional movement index) bullish cross, which further confirms our bullish stance in the counter.
On a daily close basis, one can buy in the zone of Rs 495–505, with an upside target of Rs 550 and a stop-loss of around Rs 475.
On a daily scale, the said counter has taken out the previous swing high of Rs 556. On a weekly scale, price action is sustaining above all major exponential averages, which is a sign of bullishness.
On the indicator front, the daily RSI has taken out its previous swing high, along with the daily DMI’s bullish cross, which further confirms our bullish stance in the counter.
On a daily close basis, one can buy in the zone of Rs 555–565, with an upside target of Rs 650 and a stop-loss of around Rs 515 on a daily close basis.
Since the monthly RSI is in an overbought zone and the monthly price action is above the previous monthly high, one cannot rule out further bullishness in the counter.
Also, monthly DMI’s are positive, along with the ADX (average directional index) line above 25 levels, which further confirms the bullish stance in the counter. One can buy in the zone of Rs 625–635, with an upside target of Rs 680 and a stop-loss of Rs 605 on a daily close 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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