Considering the optimism in the last two trading sessions especially after a piercing line and a double bottom formation, the market is likely to continue with the positive bias in the coming sessions as well, experts said, adding that the Nifty 50 may be inching towards the 22,400-22,500 levels, with support at 22,200, followed by 22,000 levels.
On April 22, the BSE Sensex rallied 560 points to 73,649, while the Nifty 50 jumped 189 points to 22,336 and formed a dragonfly doji kind of candlestick pattern on the daily charts, indicating indecision among bulls and bears about future market trend. All sectoral indices ended in green.
Stocks that performed better than broader markets and the benchmarks on Monday included Zydus Lifesciences, Hindustan Copper, and Siemens India. Zydus Lifesciences gained 4 percent at Rs 959.7 and formed bullish candlestick pattern on the daily charts with above-average volumes. The stock closed above its 50-day EMA (exponential moving average).
Hindustan Copper closed well above the consolidation range of previous six sessions and formed bullish candlestick pattern with long upper shadow on the daily charts, indicating selling pressure at higher levels. The stock rose 4 percent to Rs 379 with strong volumes, and traded above all key moving averages.
Siemens ended at new closing high of Rs 5,768, up 3.2 percent and formed long bullish candlestick pattern on the daily timeframe, while the trading volumes in last three sessions remained healthy. The stock traded above all key moving averages, while it has seen a breakout of downward sloping resistance trendline adjoining multiple touchpoints in April.
Here's what Ashish Kyal of Waves Strategy Advisors recommends investors should do with these stocks when the market resumes trading today:
Zydus Lifesciences prices have reversed on the upside after retesting channel which was also an important price action area which was near Rs 913 levels.
On the below chart, prices also bounced back on the upside precisely by taking support of the Ichimoku cloud. Now with follow up buying we can expect a good rise in this stock. Additionally, volumes are also picking up which is a good sign.
In short, Zydus Lifesciences looks bullish. A breach above Rs 970 is must for fresh buying to emerge with the targets of Rs 1,015. While on the downside Rs 928 is the key support level.
Overall Global commodities are rising which has added fuel to the rally of Hindustan Copper. On the daily chart, the stock is moving well within an upward sloping channel.
Conversion line (blue) of the Ichimoku cloud has acted as a support as every decline towards it has acted as a buying opportunity. So, one can continue to use any dips towards it to create long positions.
Also, ADX (average directional index) is showing readings of 31 which is suggesting that good momentum is likely to continue in this stock.
In short, trend for Hindustan Copper is positive. Use dips as a buying opportunity for a move towards Rs 400 levels as long as Rs 357 holds on the downside.
On the daily chart, Siemens prices formed a bullish candle with above its average volume which is a positive sign. Additionally, prices continued to trade above its exponential moving averages of 12 and 26 period which indicates that the overall trend remains positive.
In a nutshell, the technical outlook for Siemens India is bullish. For better risk reward buy on dips looks prudent strategy. So, one can use dips as a buying opportunity with the target of Rs 6000 as long as Rs 5,540 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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