The week started with the bulls charging the benchmark indices to their fresh record highs on April 8. Given the positive momentum in the market, experts expect the Nifty to hit 22,800 in the immediate term and then 23,000 in the following sessions, while 22,500 is expected to act as a support, followed by 22,300 as a key support.
On April 8, The BSE Sensex rallied 494 points to 74,743, while the Nifty 50 climbed 153 points to 22,666 and formed a bullish candlestick pattern on the daily charts after opening gap-up.
The broader markets ended higher but underperformed the benchmark indices. The Nifty Midcap 100 index was up 0.04 percent and Smallcap 100 index gained 0.3 percent.
Stocks that were among the top gainers in the Nifty500 index on April 8 included Exide Industries, GAIL India, and Eicher Motors. Exide Industries decisively surpassed its previous record high of February 5 and recorded a 17.2 percent rally to end at a new closing high of Rs 377. The stock has formed a robust bullish candlestick pattern on the daily charts with significantly higher volumes, while it traded above all key moving averages.
GAIL India also saw new all-time closing high of Rs 200.75, up 5.2 percent on the NSE and formed a long bullish candlestick pattern on the daily charts with strong volumes. The stock traded above all key moving averages, which is a positive sign.
Eicher Motors, too, ended at new closing high of Rs 4,205.75 after breakout of falling resistance trendline adjoining highs of December 4 and December 29 last year, and formed strong bullish candlestick pattern on the daily timeframe with healthy volumes.
Here's what Ashish Kyal of Waves Strategy Advisors recommends investors should do with these stocks when the market resumes trading today:
Auto sector continued to outperform, wherein, Eicher Motors showed strength in the previous session and was in the top gainers list in Nifty50.
Overall momentum is increasing, as the ADX (average directional index) is at 29, indicating a trending market. In addition, prices recently closed above the previous swing high, which was near Rs 4,200 levels. Along with this, increase in volumes acting as a double confirmation.
The stock has potential to move upside from current levels. However, for the better risk reward it would be wiser to use buy on dips approach.
In short, Eicher Motors looks bullish. Use dips as a buying opportunity with the target of Rs 4,350 as long as Rs 4,070 holds on the downside.
GAIL has been rising lately, continuing its strong upward trend. On the daily chart, in the previous session prices formed a bullish candle.
Price has closed above Rs 196.50 level which confirms breakout of the rounding bottom pattern. Price is trading above the Ichimoku cloud which indicates that the short-term bias is bullish.
In short, trend for this stock is positive. Use dips towards Rs 197-199 as a buying opportunity for a move towards Rs 222-225 levels as long as Rs 190 holds on the downside.
On the daily chart, the stock has given a close above its important resistance of Rs 354 levels which is a positive sign. In the previous session, prices made a new lifetime high at Rs 383.5 levels. Additionally, the Bollinger Bands have also started expanding giving us hints of possible up move in coming sessions.
While the RSI (relative strength index) is trading at an overbought zone so chances of profit booking cannot be ruled out. One can use this as a buying opportunity to ride the trend.
In short, the overall technical outlook for Exide Industries is bullish. After a sharp rise, buy on dips will be a prudent strategy for better risk reward with the target of Rs 390 as long as Rs 363 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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