After the trend reversal and formation of Evening Star kind of a candlestick pattern at the top (the bearish reversal pattern) on March 11, experts see some weakness and consolidation in the near term with support at 22,200-22,170 and hurdle on the higher side at 22,400-22,500 levels. The breaking of support levels can bring the index down to the 22,000 mark, while the surpassing of resistance can take the index to 22,600-22,700 levels.
On March 11, the Nifty 50 dropped 161 points to 22,333, and the BSE Sensex declined 617 points to 73,503, while the Nifty Midcap 100 and Smallcap 100 indices fell 0.4 percent and 2 percent.
Stocks that outperformed the broader markets on the profit-booking day included Zydus Lifesciences, Godfrey Phillips, and Linde India. Zydus Lifesciences rose 1.8 percent to end at a record closing high of Rs 994.5 and form a bullish candlestick pattern with long upper shadow on the daily charts, indicating profit-booking at higher levels. The stock traded above all key moving averages and there was above average volume.
Godfrey Phillips, too, ended at new closing high of Rs 3,637, up 10.3 percent and formed strong bullish candlestick pattern on the daily timeframe with significantly higher volumes. The stock traded above all key moving averages and continued higher highs formation for 14th consecutive session.
Linde India has seen a nice breakout of downward sloping resistance trendline adjoining highs of October 12, 2023 and February 19, 2024. The stock rallied 5.88 percent to Rs 5,906.8 and formed long bullish candlestick pattern on the daily charts with above average volumes.
Here's what Ashish Kyal of Waves Strategy Advisors recommends investors should do with these stocks when the market resumes trading today:
Pharma sector recently gave breakout of the consolidation. Pharma stocks continued to rally, wherein, Zydus Lifescience is inching higher day by day.
Prices continued to move up after giving a breakout of the channel. In addition, 20 period exponential moving average (EMA) has provided classic support in this rise. As per this, support is at Rs 955 followed by Rs 920 levels. However, after sharp rally chances of profit booking cannot be ruled out.
One can use this as a buying opportunity as overall trend is positive.
In short, trend for Zydus Lifescience is positive. Use dips as a buying opportunity with the targets of Rs 1,050 as Rs 955 holds on the downside.
The stock is making fresh record highs every day which is supported by higher volumes. In the previous session, prices gave a breakout of the channel. Also, prices continued to give a close above previous day’s high which keeps overall tone on the positive side.
Along with this, Parabolic SAR (stop and reverse) dots have continued to form below the price which is acting as a double confirmation.
In short, overall tone for Godfrey Phillips is bullish. For better risk reward, it is best to use dips as buying opportunity for the target of Rs 3,850 level as long as Rs 3,440 holds on the downside.
The stock price is moving in a rectangular range since the last few days indicating accumulation in the stock. Price has failed to give a close outside the range yet which is much awaited. A daily close above this trading range will result into a bullish breakout of the rectangular pattern.
Also, volumes are picking up. Along with this, in the previous session, stock gave breakout of the Ichimoku cloud which is good sign.
In short, trend for this stock is positive. Use dips towards Rs 5,800-5,850 as a buying opportunity for a move towards Rs 6,500-6,550 levels as long as Rs 5,580 holds on the downside.
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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