After a strong rally towards a new high with healthy volumes and positive momentum indicators on all time frames, the upward journey is expected to continue towards 21,400-21,500 levels in coming days on the Nifty50, but in between some consolidation can't be ruled out with support at the 21,000-20,800 area, experts said.
On December 14, the benchmark indices ended at a record closing high. The Nifty50 jumped 256 points to 21,183, and the BSE Sensex climbed 930 points to 70,514, while the Nifty Midcap 100 and smallcap 100 indices gained 1.3 percent and 0.9 percent.
Stocks that outsmarted the benchmark indices as well as broader markets in trade included LTIMindtree, Infosys, and Nykaa. LTIMindtree rallied 3.8 percent to Rs 5,944 on the NSE, the highest closing level since April 13 last year and formed long bullish candlestick pattern on the daily scale, with above average volumes. The stock traded well above all key moving averages (20, 50, 100 and 200-day EMA - exponential moving averages), which is a positive sign.
Infosys has formed healthy bullish candlestick pattern on the daily charts with above average volumes. The stock jumped 3.6 percent to Rs 1,501.45, the highest closing level since September 21 this year and traded above all key moving averages.
Nykaa rallied 5 percent to Rs 178, the highest closing level since December 2 last year and formed strong bullish candlestick pattern on the daily timeframe with above average volumes. Now, the stock traded above all key moving averages with 20-day EMA acting as an immediate support for the stock.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
FSN E-Commerce Ventures (Nykaa)
The counter was into a sloping channel from the past few sessions. Eventually, its downward move stopped near the important demand zone. Moreover, the strong rebound in the counter from its demand zone on daily scale suggests that the bullish momentum to remain in the near future.
Unless it is trading below Rs 170, positional traders retain an optimistic stance and look for a target of Rs 190.
On the weekly charts, the stock has given a breakout from Cup and Handle chart formation. Therefore, up move from the resistance zone for the bullish continuation rally is very likely to continue in the coming trading sessions.
For the traders, Rs 1,450 would be the key support level to watch out. Above which the uptrend structure should continue until Rs 1,620.
On the weekly scale, the counter is into a rising channel chart formation with higher high and higher low series pattern. The technical indicators like ADX (average directional index) is 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 5,700 the uptrend formation is likely to continue. Above which, the counter could move up to Rs 6,360. On the flip side, fresh sell off possible only after dismissal of Rs 5,700.
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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