Technically, the Nifty 50 seems to be trying hard to decisively climb above 21,700 area, but getting selling pressure at higher levels. Hence, unless and until, it gives a close above 21,700-21,750, the resistance area seen in the past eight sessions, the sharp uptrend is unlikely in coming days though the index gained for second consecutive session on January 11, while the 21,500 has been acting as a healthy support in these days, experts said.
On January 11, the Nifty 50 rose 29 points amid volatility to close at 21,647, and formed bearish candlestick pattern on the daily charts as the closing was lower than opening levels. The BSE Sensex rose 63.5 points to 71,721, while the Nifty Midcap 100 and Smallcap 100 indices performed better than benchmarks, rising half a percent and six-tenth of a percent respectively.
Stocks that were among leading gainers in the Nifty 500 index included Hero MotoCorp, IDFC First Bank, and Engineers India. After taking support at 20-day EMA (exponential moving average), Hero MotoCorp continued its uptrend for fifth consecutive session with higher highs higher lows formation. The stock jumped 5 percent on Thursday to end at record closing high of Rs 4,342 with robust volumes, and now continued to trade above all key moving averages (20, 50, 100 and 200-day EMA), which is a positive sign.
After downtrend for more than three weeks, IDFC First Bank has formed long bullish candlestick pattern on the daily charts and considering last three days formation, it seems to have formed Morning Star kind of pattern, which is a bullish reversal pattern. The stock rallied 3.3 percent to Rs 86.65, though the volume was tad below the average.
Engineers India jumped nearly 10 percent to end at record closing high of Rs 216.4 and formed robust bullish candlestick pattern on the daily timeframe with significantly higher volumes. The rally of 10 percent was after 5-6 days of consolidation and now the stock traded 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 is into a rising channel chart formation with higher high and higher low series pattern. The technical indicators like RSI (relative strength index) and MACD (moving average convergence divergence) also indicating further up trend from current levels which could boost the bullish momentum in coming horizon.
As long as the stock is trading above Rs 4,180 the uptrend formation is likely to continue. Above which, the counter could move up to Rs 4,640. On the flip side, fresh sell off possible only after dismissal of Rs 4,180.
After a short-term price correction, the stock has formed a double bottom chart pattern. The bullish activity near support zone indicates that the counter has limited downside. Hence making it a good candidate with regards to the risk and reward scenario.
The counter is expected to rebound from the current levels. Unless it is trading below Rs 82, positional traders can retain an optimistic stance and look for a target of Rs 95.
After the sharp upward rally, the stock went into the consolidation mode, which resulted in the formation of a Flag chart pattern on daily scale. The recent formation in the stock is representing a bullish continuation pattern, which is signifying a new leg of up move from the current levels.
For the traders, Rs 210 would be the key support level to watch out. Above which the uptrend structure should continue until Rs 235.
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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