A breather after eight sessions of sustained bull run was largely warranted, and the market is likely to continue consolidating for one or two more sessions with immediate support at 20,800 on the Nifty50 and resistance at psychological 21,000 mark, experts said. All eyes will be on the RBI's Monetary Policy Committee outcome and the reaction of the banking and financial services space on December 8.
The Nifty50 declined 37 points to 20,901, and the BSE Sensex fell 132 points to 69,522 on December 7, while the broader markets perform better than the benchmarks with the Nifty Midcap 100 index gaining 0.6 percent and Smallcap 100 index rising 0.4 percent.
Stocks that delivered better returns than the broader markets on Thursday included LIC Housing Finance, Container Corporation of India, and NHPC. LIC Housing Finance has seen consolidation breakout and rallied 2.7 percent to Rs 518.7, the highest closing level since June 15, 2021. The stock has formed bullish candlestick pattern with minor upper and lower shadows on the daily charts, and traded above all key moving averages, while on the weekly charts, the stock has decisively broken downward sloping resistance trendline in the previous week and maintained upward bias in the current week too.
Container Corporation of India also saw consolidation breakout and formed robust bullish candlestick pattern on the daily charts with strong volumes. The stock climbed 5.4 percent to end at record closing high of Rs 842 and traded well above all key moving averages (20, 50, 100 and 200-day EMA - exponential moving average).
NHPC, too, ended at new closing high of Rs 64.25, up nearly 7 percent and formed strong bullish candlestick pattern on the daily scale with healthy volumes. The stock sustained upward move for third consecutive session and traded way above all key moving averages, which is a positive sign, but momentum indicator RSI (relative strength index) at 84.5 reached to overbought levels, which is a cause of concern.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
After the sharp upward rally, the stock went into the consolidation mode, which resulted in the formation of a Flag chart pattern on daily scale. The recent formation in the stock is representing a bullish continuation pattern, which is signifying a new leg of up move from the current levels.
For the traders, Rs 500 would be the key support level to watch out. Above which the uptrend structure should continue until Rs 555.
Container Corporation of India
The stock has shown a remarkable up move in the last few weeks. The stock is trading in a rising trend continuously and forming the higher lows series. The strong bullish momentum on daily and weekly scale suggest that the counter is likely to maintain bullish continuation chart formation in the coming horizon.
As long as the counter is trading above Rs 815 the bullish formation is likely to continue. Above which, the counter could move up to Rs 910.
The counter is into a rising channel chart formation with higher high and higher low series pattern. The technical indicators like RSI (relative strength index) and MACD (moving average convergence divergence) also indicating further up trend from current levels which could boost the bullish momentum in coming horizon.
As long as the stock is trading above Rs 60 the uptrend formation is likely to continue. Above which, the counter could move up to Rs 70. On the flip side, fresh sell off possible only after dismissal of Rs 60. Below the same, the stock could retest the level of Rs 55.
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