After breaking a two-day winning streak with Bearish Belt Hold candlestick pattern on the daily charts on October 31, the trend seems to be favourable for bears who can drag the Nifty50 up to 19,000-18,900 zone amid consolidation in the coming sessions but major selling pressure looks unlikely, however, in case of an uptrend, 19,250-19,300 will be crucial for forming the base for an upward journey, experts said.
On October 31, the Nifty50 fell 61 points to 19,080, and the BSE Sensex was down 238 points at 63,875, while the advance decline ratio remained equal for yet another session. On the broader markets front, the Nifty Midcap 100 index gained 0.4 percent and Smallcap 100 index slipped 0.06 percent.
Stocks that have seen buying interest despite correction in the market included Piramal Pharma, CDSL, and FACT. Piramal Pharma has seen breakout of long downward sloping resistance trendline adjoining highs of December 1, 2022 and September 7, 2023, and rallied 9.5 percent to Rs 104.5 on the NSE, forming long bullish candlestick pattern with upper shadow on the daily charts, with robust volumes.
CDSL also saw the breakout of a slightly downward sloping resistance trendline adjoining multiple touch points and formed healthy bullish candlestick pattern on the daily scale, with robust volumes. The stock jumped 6 percent to Rs 1,456 and traded well above all key moving averages (20, 50, 100 and 200-day EMA - exponential moving average), which is a positive sign.
FACT, after correction in previous week, sharply bounced back and hit the highest ever closing level on the NSE. The stock was locked in 10 percent upper circuit at Rs 756 and formed strong bullish candlestick pattern on the daily timeframe, with above average volumes. Also, the stock traded well above all key moving averages, which is a positive sign.
Here's what Viraj Vyas of Ashika Stock Broking recommends investors should do with these stocks when the market resumes trading today:
Central Depository Services (CDSL)
The stock has been a notable outperformer since the March 2020 lows, making a substantial ascent from Rs 180 to Rs 1,680 in just a few months. However, following its all-time high in December 2022, the stock entered a phase of both time and price correction.
In June 2023, there was a pivotal development as the stock broke above a declining trendline. This breakout suggests the potential for a rectangle breakout, signifying a potentially significant bullish move.
The stock, listed as a demerged entity from Piramal Enterprises, has been entrenched in a pronounced downtrend since November 2022. However, there are now signs of a potential trend reversal.
The stock appears to be forming a Cup & Handle formation, which is often an indication of accumulation. A confirmation with a close above Rs 109, supported by substantial trading volumes, could signify the initiation of a fresh bullish upswing in the stock.
Fertilisers and Chemicals Travancore (FACT)
The stock is currently trading near its all-time highs and is displaying robust relative strength compared to the Nifty50 index. It has been on an upward trajectory since April 2023, characterized by a series of higher highs and higher lows.
The recent price action indicates a mild corrective move following a strong rally, with the stock finding support at Rs 650 levels. A breakout above Rs 765 could signal the potential for another fresh high in the making.
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