We have seen an uptrend for the fourth straight session, but there was selling pressure at higher levels as the Nifty50 could not sustain above the 19,800 mark on a closing basis on July 18. This indicates there can be a possible consolidation or minor correction in the coming days especially due to the recent upward rally after a breakout of the 19,500-19,300 range on the higher side. Even the volatility also increased for yet another session, with the India VIX moving towards the 12 mark.
The BSE Sensex rose more than 200 points to 66,795, while the Nifty50 climbed 38 points to 19,749 and formed a bearish candlestick pattern on the daily charts as the closing was lower than opening levels but there was a continuation of higher tops, higher bottoms formation.
The broader markets underperformed frontliners as the market breadth was weak with a 2:3 ratio. The Nifty Midcap 100 and Smallcap 100 indices were down 0.14 percent and 0.94 percent respectively.
Bank Nifty hit a new high of 45,906 intraday but turned volatile amid profit booking later part of the session, and finally settled with minor losses of 39 points at 45,411, while the Nifty IT was the star performer, climbing 330 points to 31,371.
Stocks that performed better than broader markets included Infosys, Asian Paints, and Birlasoft. Infosys was the top gainer in the Nifty50, rising 3.7 percent to Rs 1,475, the highest closing level since March 9 and formed a long bullish candlestick pattern on the daily charts with healthy volumes. Further, the stock has sustained above the 200-day exponential moving average (EMA) for the third straight day.
Asian Paints, which remained in an upward rally since April, rose 1.5 percent to settle at Rs 3,513, the highest closing level since September 28 last year and is a few rupees away from its all-time high of Rs 3,590 on January 10 last year. The stock has formed a bullish candlestick pattern on the daily scale with above-average volumes and maintained higher highs, higher lows formation for six days in a row.
Birlasoft sustained an uptrend with higher volumes for the fourth consecutive session, rising over 2 percent to Rs 392 on Tuesday, the highest closing level since May 6 last year. The stock has formed a bullish candlestick pattern on the daily charts, with staying above 50-day as well as 200-day EMAs.
Here's what Viraj Vyas of Ashika Stock Broking recommends investors should do with these stocks when the market resumes trading today:
Infosys has seen a strong rally from April's lows of Rs 1,200. However, on a broader time frame, the stock is still undergoing time and price correction.
It is currently approaching a resistance area formed by recent swing highs. If the stock can break above Rs 1,480-1,500 zone on a weekly basis, it could signal further bullish momentum for the stock.
Asian Paints has been consolidating since September 2021, correcting over time. Recently, it found support at the swing low and rebounded strongly, reaching the upper threshold of the consolidation.
The weekly chart shows a breakthrough above resistance at Rs 3,400-3,440, indicating renewed bullish momentum. The stock is poised to target Rs 4,000-4,100 zone, with critical support at Rs 3,375.
Birlasoft has been establishing a solid foundation within Rs 340-260 range for approximately a year. Recently, the stock successfully breached the Rs 340-level with increased trading volumes.
Notably, it has exhibited higher highs and higher lows on daily charts, suggesting a possible trend reversal. If the stock sustains above Rs 370, there is a strong probability of it advancing towards Rs 440-450 levels in the forthcoming weeks.
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