We have seen the biggest single-day fall since July 21 and, as a result, the Nifty50 reached near three-week low on August 2, but managed to take a good support at 19,500 due to buying interest at lower levels. Hence, experts feel if the index breaks the said levels, then it may take a support at 19,400-19,300 zone in the coming sessions, with likely near-term hurdle on the higher side at 19,600-19,700.
The Nifty50 fell more than 200 points to 19,527 and formed a bearish candlestick pattern on the daily charts, while the BSE Sensex tanked 677 points to 65,783 on global correction.
We have also seen correction in broader markets after a northward journey in the previous sessions. The Nifty Midcap 100 index fell 1.3 percent and Smallcap 100 index declined 1.6 percent as the breadth was in favour of bears with 1:3 ratio.
The Bank Nifty was also under pressure, falling nearly 600 points to 44,996, while the Nifty IT was down nearly 250 points to 30,044.
Stocks that were in action included KEI Industries, Suzlon Energy, and PVRInox. KEI Industries rebounded 4.5 percent to Rs 2,373 after witnessing big correction in previous few sessions. The stock has formed bullish candlestick pattern on the daily charts with above average volumes, and closed above 50-day EMA (exponential moving average).
PVRInox continued its uptrend for third consecutive session, rising 2.8 percent to Rs 1,609, the highest closing level since February 22 this year. With this rally, the stock has come back above 200-day EMA, while the trading volume was very strong in last couple of weeks.
Suzlon Energy fell more than 4 percent to Rs 18.50 and formed long bearish candlestick pattern on the daily charts with above average volumes, while the stock still sustained above key moving averages (21, 50, and 200-day EMAs).
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:
Recently the said counter has formed a Bullish BAT pattern on a weekly scale with Rs 1,450-1,550 as the potential reversal zone and the current market price is well above it.
Additionally on a daily scale, PVR is sustaining above its all-major exponential moving averages. Also, PVR has reversed from its above-mentioned PRZ (potential reversal zone) along with RSI (relative strength index) rebounding from 35-40 levels thus hinting towards bullish bias.
One can buy in the range of Rs 1,600-1,620 with an upside target of Rs 1,740 and the stop-loss would be Rs 1,510 on a daily close basis.
At the current juncture, Suzlon has made a bearish divergence on daily scale, where RSI is making lower highs and price action making higher highs.
So one should avoid fresh longs and book profits if already holding in the range of Rs 18-19.
Recently the said counter made a top of Rs 2,800 and then it gave a decent correction of Rs 500 which comes around 18 percent. At the current juncture, it has taken support near the 50-day exponential moving average.
Additional confirmation is given by Doji-like structure on 50 DEMA (exponential moving average).
On the indicator front, RSI has made an impulsive structure near 40 levels thus hinting towards bullish bias. One can buy in the range of Rs 2,360-2,380 with an upside target of Rs 2,600 and the stop-loss would be Rs 2,200 on a daily close basis.
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