We have seen unstoppable rally in the equity markets for six days in a row till July 4 so far, as the buying interest was seen in banking and financial services, and technology stocks. But there was some profit-taking towards the end of session and, as a result, the Nifty50 has formed a hanging man kind of pattern on the daily scale at the top of uptrend, which is a bearish reversal pattern.
The benchmark indices saw record closing high. The BSE Sensex jumped 274 points to 65,479, and the Nifty50 gained 67 points to 19,389, while the Nifty Midcap 100 index was down 0.2 percent and Smallcap 100 index gained 0.25 percent.
The Nifty Bank also ended at a record closing high, rising 143 points to 45,301, while the Nifty IT also participated in the rally, climbing 305 points to 29,730.
Stocks that were in action included KEC International, Aster DM Healthcare, and Bajaj Finance. KEC International clocked 3 percent gains to end at a new closing high of Rs 575 and formed a bullish candlestick pattern on the daily charts after a consolidation breakout with above-average volumes.
Aster DM Healthcare was the biggest gainer in the Nifty500 index, rising 13.5 percent to see all-time closing high of Rs 325.70. The stock has formed robust bullish candlestick pattern on the daily charts with significantly higher volumes. On the monthly basis, the stock has been in an uptrend since February.
Bajaj Finance topped the Nifty50, surging over 7 percent to Rs 7,860, the highest closing level since October 18, 2021. The stock has seen a strong gap up opening and formed bullish candlestick pattern on the daily timeframe with robust volumes and continued higher highs, higher lows formation for fourth consecutive session.
Here's what Viraj Vyas of Ashika Stock Broking recommends investors should do with these stocks when the market resumes trading today:
KEC is currently in a secular uptrend, but it tends to undergo significant consolidation phases before experiencing breakouts. The recent price action indicates a consolidation pattern, but what stands out is the above-average volumes accompanying it. This suggests strong participation and interest in the stock.
Based on the analysis, it is expected that KEC will move towards the price range of Rs 650-675 levels. Additionally, the 21-day exponential moving average (EMA) at 550-level can serve as a reliable trend filter, providing support and indicating the stock's overall bullish momentum.
After a period of time and price correction since its listing, the stock experienced a significant breakthrough when it surpassed the IPO base level at Rs 180. Since then, the stock has displayed a consistent upward trajectory. Although being a small-cap stock, it has undergone several consolidation phases, but each move has ultimately resulted in a sharp rally.
The recent price action indicates a breakout above the 200 percent extension of the IPO base range (Rs 182-79). Such breakouts often lead to strong and intense rallies. However, it is important to note that the stock may encounter resistance in the range of Rs 350-360 levels.
At present, it is advisable to ride the current trend rather than initiating fresh positions. It is also recommended to maintain a trailing stop-loss at around the Rs 300-level to protect against any potential downside risks.
The stock has witnessed a remarkable surge from its COVID-19 lows, and from October 2021 onwards, it has undergone a consolidation phase both in terms of time and price for approximately 88 weeks. The recent breakout from this consolidation is highly significant as it could signal the start of a strong impulsive move in the stock.
In the near term, the stock is expected to move towards Rs 8,500 levels, indicating a potential bullish momentum. Looking ahead, over the course of a year, a longer-term target of Rs 10,000 is anticipated.
It is important to note that the stock has critical support at Rs 7,300-level, which should be closely monitored.
Given the stock's impressive run-up and the recent breakout from the consolidation phase, the outlook remains positive. However, it is advisable to keep track of critical support levels and closely monitor any potential changes in the stock's performance.
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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