Even after a three-day run-up, the Nifty 50 has to give a decisive close above 22,300 level to get into a strong bullish mood, till then the consolidation may continue with immediate support at 21,900 and a key support at 21,700, the low of the recent downtrend tested last week, experts said.
On March 22, a day before the long weekend, the benchmark indices extended the uptrend for three straight sessions. The Nifty 50 climbed 85 points to 22,097, and formed a bullish candlestick pattern on the daily charts, while the BSE Sensex was up 191 points to 72,832.
The Nifty Midcap 100 and Smallcap 100 indices outperformed the frontline indices, rising 0.6 percent each on positive breadth.
Stocks that recorded better performance compared to the broader markets included Eicher Motors, Symphony, and Apollo Hospitals Enterprise. Eicher Motors extended northward journey for the fourth straight session, rising 1.8 percent to Rs 3,988 on the NSE and formed a bullish candlestick pattern with long lower shadow on the daily charts, indicating buying interest at lower levels. Now, the stock traded above all key moving averages, which is a positive sign.
Symphony has seen a decisive breakout of consolidation seen in the past several sessions after downtrend and recorded 5 percent rally to Rs 868. The stock formed robust bullish candlestick pattern on the daily timeframe with significantly higher volumes and climbed back above 10 and 21-day EMAs (exponential moving averages).
Apollo Hospitals Enterprise has also seen a strong consolidation breakout and jumped 3 percent to Rs 6,376, formed long bullish candlestick pattern on the daily charts with above average volumes. The stock traded above all key moving averages.
Here's what Ashish Kyal of Waves Strategy Advisors recommends investors should do with these stocks when the market resumes trading today:
On the daily chart, we can see that stock has formed consolidation pattern. A close above Rs 4,015 level will confirm breakout of the said pattern. After which we can expect a good rise in this stock.
On the below chart, we have also shown Bollinger Bands. Wherein, we can see that prices are currently trading close to the upper bands. Hence buying may emerge if prices close above the upper bands.
In short, overall tone for Eicher Motors is bullish. Any close above Rs 4,015 is must for further bullish momentum to continue with the target of Rs 4,200. While on the downside, Rs 3,860 is the key support level.
On the daily chart, we can see the stock showed impulsive rise as per Elliott wave and now completed wave 2 near Rs 6,000 level. The up move can be wave 3 which can be strong and powerful. Also the stock has given a breakout from the consolidation pattern.
On the below chart, we have shown MACD (moving average convergence divergence) indicator, wherein, MACD line crossed above the MACD signal line and further break above 0 line will indicate rising momentum on upside.
In short, trend for Apollo Hospitals is positive. We can expect a move to Rs 6,800 and probably higher as long as Rs 6,100 holds on the downside.
In the previous session, prices have given a close at the mid of Bollinger bands. A close above it with follow up action is must for further bullish momentum to continue. Also, volumes are picking up, which is a good signal.
In short, the trend for Symphony is positive. A daily close above Rs 870 will confirm about positive trend reversal and then we can expect a rise towards Rs 895 levels. On the downside, Rs 820 remains the crucial support level.
Follow Ashish Kyal on Twitter - @kyalashish
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