The market is expected to maintain a positive bias and move towards 22,200-22,500 levels in the near term, with a support at 21,900-21,800 levels for the benchmark Nifty 50 index. The higher highs, higher lows formation for the last three days, positive trend in momentum indicators like RSI (relative strength index) and strong volumes in key short-term moving averages indicate the trend is largely in favour of bulls, experts said.
On January 15, the benchmark indices put up fresh record closing high with the Nifty 50 rising 203 points to 22,098 and the BSE Sensex climbing 759 points to 73,328, while the Nifty Midcap 100 and Smallcap 100 indices gained 0.7 percent and 0.4 percent.
Stocks that recorded smart rally among others included Rail Vikas Nigam, SJVN, and Blue Star. Rail Vikas Nigam since after crossing the previous record high on January 10 remained in an uptrend and consistently holding the said previous high of Rs 199.25. The stock on Monday rallied 8.6 percent to end at record closing high of Rs 220.65 and formed healthy bullish candlestick pattern on the daily charts, with strong volumes, while trading above all key moving averages.
SJVN also saw record closing high at Rs 102.5, up 8.9 percent and formed strong bullish candlestick pattern on the daily timeframe with robust volumes, while trading above all key moving averages, which is a positive sign. More importantly, the stock has seen a breakout of downward sloping resistance trendline adjoining highs of December 15, 2023 and January 8.
Blue Star, too, saw new closing high on Monday at Rs 1,062.35, rising 4 percent and formed long bullish candlestick pattern on the daily charts with higher highs, higher lows formation for three days in a row. With above average volumes, the stock its previous record high and remained above all key moving averages.
Here's what Ashish Kyal of Waves Strategy Advisors recommends investors should do with these stocks when the market resumes trading today:
During the previous trading session, there was a notable increase in all Railway stocks. RVNL experienced a significant rise and witnessed heavy buying. The below chart shows that the stock has precisely rebounded from the channel support.
As per wave perspective, wave 5 is unfolding on the upside for a target of Rs 275 levels. On the daily chart, we can see 40-day of exponential moving average is acting as brilliant support. Support as per this, comes near Rs 180 levels. Along with this, ADX (average directional index) is trading at 26 suggesting that momentum is picking up which is a good sign.
In short, trend for RVNL is positive. Use buy on dips for move to Rs 275 with immediate support at Rs 195 levels.
SJVN has been moving in strong uptrend. On the daily chart, price has given a fresh breakout from a consolidation pattern. If we look at Supertrend then prices have managed to break its resistance and indicator has just turned green which is a positive sign. Even MACD (moving average convergence divergence) has given a bullish crossover. Volumes are picking up and good momentum is expected in coming sessions.
In short, trend of the stock is bullish. Use dips as a buying opportunity with the target of Rs 112 levels. While on the downside nearest support is at Rs 95 level.
Blue Star has been moving higher and not a single candle has given a close below previous day’ low since past 7 trading sessions which suggest stock is in strong up trend.
On the daily chart, the stock gave a breakout of the rounding bottom pattern as prices gave a close above Rs 1,038 levels. The MACD bullish crossover is acting as a double confirmation. However instead of catching tops, buy on dips looks better strategy to ride the trend.
In short, trend for this stock is positive. Use dips towards Rs 1,035-1,040 as buying opportunity for a move towards Rs 1,130 levels. Nearest support is at Rs 1,010 level. So, as long as we are above Rs 1,010 level trend remains positive.
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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