The market retreated after four-day gains due to selling pressure in banking & financial services, metal, and oil & gas stocks on May 31. The correction in global counterparts also caused downtrend in the benchmark indices.
The BSE Sensex fell nearly 350 points to 62,622, and the Nifty50 dropped around 100 points to 18,534, but the broader markets performed better than leading indices as the Nifty Midcap 100 index gained four-tenth of a percent, and Smallcap 100 index climbed a percent.
Bank Nifty index fell more than 300 points to close at 44,128, but defended 44,000 mark and saw some recovery from day's low.
Stocks that turned outperformer included PI Industries, which rose 4 percent to Rs 3,616.8, the highest closing level since November 9 last year, and formed strong bullish candlestick pattern on the daily charts with healthy volumes. Broadly, the stock remained in an uptrend since May 19, barring intermittent small correction.
Dixon Technologies jumped over 5 percent to Rs 3,878.75, the highest closing level since January 3, 2023, and formed long bullish candlestick pattern on the daily scale with above average volumes. Largely, the stock has seen healthy uptrend in second half of May month.
CDSL has seen a decisive breakout of one-and-half-month long consolidation and formed long bullish candlestick pattern on the daily timeframe, with robust volumes. Also, the stock has given a breakout of downward sloping resistance trendline, adjoining highs of February 1 and April 21.
Here's what Jigar S Patel of Anand Rathi Shares & Stock Brokers recommends investors should do with these stocks when the market resumes trading today:
Since last 3 months, it has already given 50 percent return from the low of Rs 2,600 till Rs 3,900. At current juncture price action is facing resistance near 0.618 retracement levels of previous down move.
Additionally, it has made hidden divergence (refer to the chart ). One can book profit in the zone of Rs 3,800-4,000 levels. As of now no fresh longs are recommended.
Though PI Industries might be looking lucrative due to recent up moves in the counter, one can see that it is currently approaching its historical resistance of Rs 3,650-3,700. Having said that, it has already given 20 percent return in the last 2 months.
Last but not the least, it is way above 200 DEMA (daily exponential moving average ) so mean reversion could be possible if it gets rejected from its above-mentioned resistance zone.
One can book profit in the zone of Rs 3,600-3,700 levels. As of now no fresh longs are recommended.
Central Depository Services (CDSL)
For the entire month of May 2023, it consolidated in the zone of Rs 970-1,000. In previous trading sessions, it gave massive breakout along with huge volume which is hinting at bullish momentum in the coming few sessions.
The best part of above-mentioned consolidation zone of Rs 970-1,000 is that those were the levels of monthly central pivot range (refer to the chart). So, one can buy in small tranche in the zones of Rs 1,035-1,045 and another Rs 1,015-1,020 with an upside target of Rs 1,120 and stop-loss would be Rs 990 on daily close basis.
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