The market witnessed consolidation in the range of 19,750-19,850 throughout the session after two days of rally and ended October 12 with moderate losses. Given the spinning top kind of pattern formed on the daily scale, the index may see some reversal in trend. Hence, if it decisively breaks 19,750, then 19,650 can act as a floor in the coming sessions, which coincides with the 50-day EMA (exponential moving average), but the strong close above 19,850 may take the Nifty50 towards 19,900-20,000 levels, experts said.
The Nifty50 declined 17 points to 19,794, and the BSE Sensex slipped 65 points to 66,408, while the market breadth remained in favour of bulls with around 3:2 ratio. The Nifty Midcap 100 and Smallcap 100 indices gained 0.2 percent and 0.65 percent.
The Bank Nifty held on to the 44,500 mark and gained 82 points to 44,599, extending the uptrend for the third straight session, while the Nifty IT dropped sharply by 545 points to 32,004, breaking the 20-day EMA (placed at 32,260), but took support at upward sloping support trendline.
Stocks that performed better than broader markets included GAIL India, NCC, and Bosch. GAIL India shares ended at record closing high of Rs 129.35, up 4.7 percent and formed strong bullish candlestick pattern on the daily charts with healthy volumes by taking support at 20-day EMA. The stock has seen a decisive breakout of downward sloping resistance trendline, and broadly continued making higher tops, higher bottoms since June low.
NCC has seen a breakout of horizontal resistance trendline adjoining multiple touch points and formed long bullish candlestick pattern with strong volumes on the daily scale. With Thursday's rally, stock traded well above all key moving averages (20, 50, 100 and 200-day EMA), and rose nearly 6 percent to Rs 165.
Bosch has formed robust bullish candlestick pattern on the daily charts after Doji kind of pattern formation in previous session, with significantly higher volumes on Thursday. Also there was a breakout of slightly downward sloping resistance trendline and jumped nearly 4 percent to Rs 20,456, the highest closing level since September 19, 2018, with trading well above all key moving averages.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
The counter witnessed short-term correction from the higher levels and moved within a confined range. However, the counter has formed higher bottom series and it has given the range breakout. Therefore, the closing above the resistance line indicates further bullish momentum to continue from the current levels.
For the trend following traders, Rs 158 would act as support level. Above the same, it could move up to Rs 176-180 levels. On the flip side, below Rs 158, traders may prefer to exit from the position as it could slide further till Rs 152 zone.
The stock has given a breakout of its Ascending Triangle chart pattern on the weekly scale. Additionally, it has formed a higher bottom formation along with incremental volume activity, hence the structure of the stock indicates the beginning of a new up move from the current levels.
For positional traders, Rs 19,700 would be the trend decider level. Trading above the same uptrend formation will continue till Rs 21,900. However, if it closes below Rs 19,700, traders may prefer to exit from trading long positions.
The counter has given a breakout of its Symmetrical Triangle chart pattern with a strong bullish candlestick. Moreover, on the daily charts, it has formed a higher bottom formation, therefore the structure of the counter indicates further bullish momentum from the current levels.
Unless it is trading below Rs 125, positional traders can retain an optimistic stance and look for a target of Rs 140.
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