With a superb rally in the week ended December 1 with strong volumes, after days of consolidation, the bulls gathered solid strength. With the BJP's victory in three out of the four states that declared results on December 3 hinting at a continuation of the regime at the Centre in the general elections next year, bulls have turned stronger. Experts believe the upbeat mood can push the Nifty50 towards 20,400-20,500 levels in the coming days, with support at the 20,200-20,000 zone and after that there could be some consolidation before getting into another leg of rally.
On December 1, the Nifty50 climbed 135 points to 20,268 and formed a bullish candlestick pattern, making a higher-highs-higher-low formation for four days in a row, while the BSE Sensex jumped 493 points to 67,481.
The broader markets also remained positive with the Nifty Midcap 100 and Smallcap 100 indices gaining 1.1 percent, and half a percent.
Stocks that outpaced the broader markets in terms of gains included Zee Entertainment Enterprises, Apollo Tyres, and Can Fin Homes. Zee Entertainment Enterprises rallied more than 5 percent and formed long bullish candlestick pattern on the daily charts after breakout of downward sloping resistance trendline, with healthy volumes. The stock also traded well above all key moving averages (20, 50, 100 and 200-day EMA - exponential moving average), which is a positive sign.
Apollo Tyres surpassed its previous record high (touched in August this year) and hit a new high of Rs 445.80 intraday on last Friday after decisively breakout of falling resistance trendline. The stock ended at record closing high of Rs 442.5, up 3.5 percent and formed long bullish candlestick pattern on the daily scale with trading above all key moving averages.
Can Fin Homes has seen strong breakout of horizontal resistance trendline adjoining multiple touchpoints after several months of consolidation, and formed long bullish candlestick pattern on the daily timeframe with strong volumes. The stock climbed nearly 4 percent to Rs 813.6 and traded above all key moving averages.
Here's what Rajesh Palviya of Axis Securities recommends investors should do with these stocks when the market resumes trading today:
Since the past couple of months, the stock is consolidating near its 38.2 percent Fibonacci retracement level (Rs 244) of previous rally (Rs 170-290) which remains a crucial support zone.
With Friday's gain the stock has witnessed high volumes buying momentum near its support zone indicating increased participation near support zone. This buying was also observed from its 20, 50 and 100 day SMA (simple moving average) support zone which reconfirms bullish sentiments.
The daily, weekly and monthly strength indicator RSI (relative strength index) is in positive terrain which shows rising strength.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 300-320, with downside support zone of Rs 250-240 levels.
On the daily chart, the stock has confirmed "Cup & Handle" formation breakout at Rs 440 levels on a closing basis. This breakout is accompanied with huge volumes indicating bullish sentiments.
The stock is well placed above its 20, 50, 100 and 200 day SMA which reconfirms bullish trend. The daily, weekly and monthly strength indicator RSI is in positive terrain which shows rising strength.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 485-500, with downside support zone of Rs 430-410 levels.
With Friday's strong gains, the stock has decisively broken out its past four months "consolidation range" (Rs 800-700) on a closing basis. This breakout is accompanied with huge volumes which signals increased participation. This buying momentum was observed from its 20, 50 and 100 day SMA support zone of Rs 763 levels.
The daily "Bollinger band" buy signal suggests increased momentum. On the weekly and monthly chart, the stock is in strong uptrend forming a series of higher tops and bottoms which suggests any small correction remains as a buying opportunity.
The daily, weekly and monthly strength indicator RSI is in positive terrain which shows rising strength.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 850-900, with downside support zone of Rs 780-750 levels.
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