Bulls managed to set an optimistic tone in the market on February 6, overpowering bears that ruled the Street for the last couple of sessions, indicating that the Nifty 50 would be ready to take a leap towards a record high of 22,126 level in the coming sessions, with immediate support at 21,700 and a crucial one at the 21,500 levels, experts said.
On February 6, the Nifty 50 jumped 158 points to 21,929 and formed a bullish candlestick pattern on the daily charts, while the BSE Sensex rose 455 points to 72,186. The market breadth was also positive as around two shares advanced for every falling share on the NSE.
The broader markets also traded high with the Nifty Midcap 100 and Smallcap 100 indices rising 1.2 percent and 0.8 percent, respectively.
Stocks that outperformed broader markets included HDFC Life Insurance Company, Biocon, and Ipca Laboratories. HDFC Life Insurance Company rebounded 5.2 percent to Rs 592.75, after hitting the multi-month low of Rs 561.55 in previous session, and formed robust bullish candlestick pattern on the daily charts with strong volumes. The stock was falling since mid of December 2023.
Biocon continued uptrend for fifth consecutive session, rising nearly 5 percent to Rs 298.55, the level which was last seen on October 4, 2022. The stock has formed long bullish candlestick pattern with long upper shadow on the daily timeframe with healthy volume. The stock has seen a breakout of horizontal resistance trendline and traded above all key moving averages.
Ipca Laboratories has seen a breakout of slightly downward sloping resistance trendline adjoining highs of December 5 last year and January 12 this year. The stock climbed 5.7 percent to Rs 1,199 and formed strong bullish candlestick pattern on the daily charts with healthy volumes, while it traded above all key moving averages, which is a positive sign.
Here's what Avdhut Bagkar of StoxBox recommends investors should do with these stocks when the market resumes trading today:
A clear horizontal range breakout, supported by strong volumes and divergence on the strength oscillator, has prompted the next leg of upside in Ipca Laboratories’ shares. The stock is on track to reach Rs 1,400 level as it portrayed resilient stability over Rs 1,150 mark.
The stock has absorbed all the sell-off emerged in the range of Rs 1,160 -1,100 levels, steering short covering.
Conservative traders may opt to accumulate on a healthy correction towards Rs 1,125, preserving Rs 1,080 as a support mark. The stock is heading towards Rs 1,400.
The “Golden Crossover” breakout has prompted fresh upside in the shares of Biocon, with price action pointing a rally towards Rs 350 level in a short-medium term period. The immediate support comes to Rs 275, followed by Rs 250 levels.
Stability over Rs 350 could see the price action heading towards Rs 425-mark. Furthermore, the “Flag Pattern” breakout in daily has improved the immediate term position of the stock.
Aggressive trade may take entry around Rs 300-290 level, aiming for Rs 350 mark, holding Rs 275 as an immediate stop-loss.
While the shares of HDFC Life Insurance Company are trading beneath the 200-simple moving average (SMA), the price action is denoting a short-term reversal that could seek to cross the 200-SMA mark placed at Rs 624. The strength oscillator, relative strength index (RSI) has surged over the oversold territory, proposing bullish momentum in play.
One can enter at the current market price, retaining Rs 560 as a closing basis support to look at achieving Rs 624 mark.
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