The phase of consolidation, which has been on for the last three trading sessions, is expected to continue in the monthly F&O expiry session as well on April 25 with the Nifty 50 likely to face resistance at 22,450-22,500 and support at the 22,300 mark, experts said, adding that the close above 22,500 is required for the index to march towards a new high.
On April 24, the benchmark indices extended the uptrend for the fourth consecutive session. The Nifty 50 rose 34 points to 22,402, and formed a small-bodied bearish candlestick pattern with minor upper shadow which resembles Doji kind of a candlestick pattern on the daily charts.
The BSE Sensex advanced by 114 points to 73,853, while the Nifty Midcap 100 and Smallcap 100 indices gained 0.8 percent and 0.4 percent.
Stocks that registered better performance than the broader markets on Wednesday included Finolex Industries, Steel Authority of India, and Bharat Dynamics. Finolex Industries decisively surpassed its previous record high (touched earlier in current month) and rallied 7.5 percent to end at a new closing high of Rs 274.10 on the NSE. The stock has formed a Bullish Marubozu candlestick pattern on the daily charts at the high, with robust volumes, and traded above all key moving averages.
Steel Authority of India rallied 8 percent to Rs 164.65, the highest closing level since April 27, 2011, and formed a strong bullish candlestick pattern on the daily charts with significantly higher volumes. The stock traded well above all key moving averages.
Bharat Dynamics decisively surpassed its previous record high of February 27 and ended at new closing high of Rs 2,046, up 6.4 percent with robust volumes. The stock has formed long bullish candlestick pattern on the daily timeframe and traded above all key moving averages, which is a positive sign.
Here's what Jigar S Patel of Anand Rathi Shares & Stock Brokers recommends investors should do with these stocks when the market resumes trading today:
Finolex, despite its recent attractive performance in the market, has seen a Bearish AB=CD pattern, which is anticipated to manifest in the stock's daily trading range, particularly within the zone of Rs 275-280. This pattern typically signals a potential reversal in the upward trend, indicating a shift towards a downward movement in the stock's value.
Consequently, traders and investors are advised to exercise prudence by considering booking profits within the mentioned zone and refraining from initiating long positions at the present moment.
This recommendation emphasizes a proactive stance towards managing investment risk and aligning strategies with the anticipated market movements, thereby fostering informed decision-making amidst the dynamic nature of financial markets.
Steel Authority of India (SAIL)
Despite its recent positive performance in the market, it draws attention to a technical analysis pattern known as the bearish Deep Crab pattern, which is anticipated to form within SAIL's daily trading range, particularly within Rs 168-172 zone. This pattern typically indicates a potential reversal in the prevailing upward trend, suggesting a forthcoming decline in the stock's value.
Consequently, traders and investors are advised to exercise prudence by considering profit-taking actions within the specified zone, ideally around Rs 168-170, and refraining from initiating new long positions at this juncture.
In the recent trading session, Bharat Dynamics (BDL) exhibited a significant breakout above the R4 camarilla pivot (Rs 1,980), maintaining its position above this level. Additionally, daily RSI (relative strength index) have ventured into the overbought territory, suggesting a bullish momentum anticipated in the upcoming days.
The combination of price action persisting above the R4 camarilla pivot and RSI registering as overbought presents a compelling technical confluence, reinforcing the bullish sentiment surrounding BDL.
Consequently, investors may consider initiating a buy position within the range of Rs 2,000-2,050, targeting an upside potential of Rs 2,320, while prudently placing a stop-loss near Rs 1,878 based on daily closing prices.
Note: Camarilla pivot points is a math-based price action analysis tool that generates potential support and resistance levels.
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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