A decisive consolidation breakout and a four-day rally with consistency in forming higher highs and higher lows indicate more room for the indices to climb in the upcoming trading sessions. The immediate hurdle is seen at 21,700-21,800 levels on the higher side and support at 21,500-21,300, experts said.
The benchmark Nifty 50 spiked 214 points or 1 percent to end at a new closing high of 21,655 on December 27, a day before the monthly expiry of futures and options contracts. The BSE Sensex surpassed and closed above the 72,000 mark for the first time, rising 702 points to 72,038.
The broader markets underperformed the front-liners and even the market breadth was not strongly in favour of bulls. The Nifty Midcap 100 index was up 0.4 percent and Smallcap 100 index gained 0.45 percent.
Stocks that fared better than benchmarks as well as broader markets included Hindalco Industries, Sharda Cropchem, and Sona BLW Precision Forgings. With consistent rally for yet another month, Hindalco Industries moved very close to its all-time high of Rs 636. The stock on Wednesday jumped 4.4 percent to Rs 605.6 on the NSE and formed strong bullish candlestick pattern on the daily timeframe with healthy volumes. The stock consistently traded above all key moving averages (20, 50, 100 and 200-day EMA - exponential moving averages) since the start of November.
Sharda Cropchem climbed 6.4 percent to Rs 454.8 and surpassed 200-day EMA after a long time. The stock has formed healthy bullish candlestick pattern on the daily charts with robust volumes, after the breakout of downward sloping resistance trendline. The stock reached to the crucial resistance area of Rs 460-465, where it reached now for third time since August this year.
Sona BLW Precision Forgings has seen the highest single-day volume since May 31 this year, and recorded 6.2 percent gains at Rs 614.5. The stock has seen a breakout of falling resistance trendline adjoining multiple touchpoints and formed strong bullish candlestick pattern on the daily scale. It reached the high of August 2023, i.e. Rs 626, which seems to be crucial for further upward trend.
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:
Though the counter looks lucrative due to the on-going rally, But one needs to be cautious as it is approaching its historical high of Rs 626 (which was made in March 2022).
As of now, fresh longs are not advised; book partial profits between Rs 600 and Rs 620, and wait for meaningful correction.
Since the last 7-8 weeks, the counter has been consolidating between Rs 400 and Rs 430. Recently, it has taken out the said range and sustained above it. Having said that, on a weekly scale, bull divergence has seen in stochastics, which further adds to the bullish stance (refer to the chart).
Thus, one can buy in the zone of Rs 450–455 for a target of Rs 500 and a stop-loss of Rs 425 on a daily closing basis.
In recent times the said counter is trading in the range of Rs 550-625. Though the technical setup is looking bullish but one needs to wait for further confirmation once Rs 625 gets cleared on weekly scale.
On indicator front weekly stochastics has reversed from 60 levels thus making it lucrative buy candidate. Thus, one can buy in the zone of Rs 625-630 with upside target of Rs 700 and stop-loss of Rs 590 on daily close basis.
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