The rangebound trade, which was seen in previous session after major downfall, is expected to continue in the coming sessions too, with support at 22,300 on the Nifty 50, as the bulls seem to have turned cautious after sharp increase in volatility in the recent past may be amid general elections. Hence, the index is expected to consolidate in the range of 22,300-22,800 levels going ahead as the breaking of this range on either side can give direction to the market, experts said.
On May 6, the Nifty 50 fell 33 points to 22,443, and formed bearish candlestick pattern besides the long bear candle of previous session on the daily charts, while the BSE Sensex was up 17 points at 73,896.
The broader markets were under pressure on Monday, with negative breadth. The Nifty Midcap 100 index fell half a percent and Smallcap 100 index dropped 1.5 percent.
Stocks that outperformed broader markets on Monday included Godrej Properties, Brigade Enterprises, and Prestige Estates Projects. In fact, the entire sector was strong yesterday, with Nifty Realty index rising 2.76 percent.
Godrej Properties ended at new closing high of Rs 2,843, up 10.6 percent on the NSE, and formed robust bullish candlestick pattern on the daily charts, with significantly higher volumes. The stock now traded above all key moving averages, while also there was a falling resistance trendline breakout with a gap-up opening.
Brigade Enterprises, too, saw a breakout of downsloping resistance trendline adjoining highs of February 7 and April 26 this year, and formed strong bullish canldestick pattern on the daily charts with healthy volumes. The stock jumped nearly 9 percent to end at fresh closing high of Rs 1,110 on the NSE, and traded above all key moving averages.
Prestige Estates Projects has also seen new closing high, at Rs 1,557.5 with 6.6 percent gains. The stock has been in an uptrend for last several sessions and formed bullish candlestick pattern on the daily timeframe with healthy volumes, and traded above all key moving averages now.
Here's what Ashish Kyal of Waves Strategy Advisors recommends investors should do with these stocks when the market resumes trading today:
On the below chart, prices are trading well within an upward sloping channel. Currently, the stock is inching higher day by day towards upper end of the channel. On the below chart, we can see that in the previous session, prices gave breakout of the upper Bollinger bands which is a good sign.
However, after sharp rally chances of profit booking cannot be ruled out. But one can use dips as a buying opportunity as overall trend is positive.
In short, Godrej Properties is bullish. Use dips as a buying opportunity with the target of Rs 2,900 or higher. While on the downside, Rs 2,750 is the key support level.
Brigade has been rising lately and is intact in a significant uptrend. Price has closed above Rs 1,108 level which confirms breakout of the rounding bottom pattern. We have seen ADX (average directional index) indicator showing readings of 33.58 which is above 25, indicating that the good momentum is likely to continue in this stock.
In short, trend for this stock is positive. Use dips towards Rs 1,090-1,100 as a buying opportunity for a move towards Rs 1,220-1,230 levels as long as Rs 1,050 holds on the downside.
Since April 15th not a single candle has given a close below prior candle’s low suggesting strength in ongoing trend. Trend is likely to remain positive as long as we do not see a close below prior day’s low.
In short, the trend for Prestige Estates Projects is bullish. One can use dips as a buying opportunity for the target of Rs 1,600. On the downside, next important support is near Rs 1,496 levels.
Follow Ashish Kyal on Twitter - @kyalashish
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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