The market is expected to consolidate further as long as the Nifty 50 holds below 22,500, which is a crucial level to watch out for going ahead as surpassing this on a closing basis can open the doors for the 22,700-22,800 levels in the short term, with immediate support at 22,300-22,200, followed by crucial support at 22,000, experts said.
On April 2, the market has saw consolidation and closed moderately lower because of recovery in the last hour of trade. The Nifty 50 fell 9 points to 22,453 and formed a Doji kind of candlestick pattern on the daily charts, while the BSE Sensex declined 111 points to 73,904.
The broader markets continued to outperform the benchmark indices as the Nifty Midcap 100 and Smallcap 100 indices gained 1.2 percent each, while the declining volatility remained quite supportive for bulls, as the India VIX declined 3.55 percent to 11.65 level, the lowest closing level in current calendar year.
Stocks that recorded healthy gains on the day of consolidation included Steel Authority of India, Bharat Electronics, and IRCTC. Steel Authority of India has seen a decisive breakout of downward sloping resistance trendline adjoining highs of February 7 and March 4, and clocked 5 percent rally at Rs 148 on the NSE. The stock has formed long bullish candlestick pattern on the daily charts, with healthy volumes, while the stock traded above all key moving averages.
Bharat Electronics decisively surpassed its previous record high and rallied 4.7 percent to end at record closing high of Rs 221. The stock has formed long bullish candlestick pattern on the daily timeframe with robust volumes, while the stock traded above all key moving averages.
IRCTC has seen a breakout of horizontal resistance trendline adjoining multiple touchpoints and climbed 3.5 percent to Rs 1,003.8. The stock has formed long bullish candlestick pattern on the daily charts with above average volumes, while trading above all key moving averages.
Here's what Riyank Arora of Mehta Equities recommends investors should do with these stocks when the market resumes trading today:
The stock has touched an important resistance zone of Rs 148.40 - 150.00 on its daily timeframe charts. With the RSI (relative strength index - 14) on the daily timeframe being 68.74, the momentum indicates a strong uptrend in the stock.
An immediate support is placed at Rs 143 mark, below which the stock would lose its strength. On the upside, a breakout above Rs 151 should trigger an up-move in the stock towards Rs 157.50 and Rs 160 gradually over time.
We advise traders to keep a trailing stop-loss at Rs 143 mark for all open positions in the stock.
Indian Railway Catering & Tourism Corporation (IRCTC)
The stock has given a good breakout above its recent swing high resistance mark of Rs 989.90 and successfully managed to close above the same. Anchor VWAP (volume-weighted average price) suggests a major support placed near Rs 940 mark, a closing below which should trigger a downside move in the stock.
On the upside, however, targets are maintained near Rs 1,050 and above. We advise short-term investors to keep a strict stop-loss at Rs 940 mark on a daily closing basis in the stock.
The stock has given a good breakout above its all-time high resistance mark of Rs 216.80 on the daily charts. With the RSI (14) on daily charts being near 69.70 and the stock witnessing a sharp surge in volumes, with the volume being nearly 3 times its average (30) days traded volumes - the stock looks poised for an upside move towards Rs 240 and Rs 250 in a spree of momentum rally.
Any pullback towards Rs 217-218 should offer a good buy on the stock. We advise traders to keep a strict stop-loss at Rs 212 mark on a daily closing basis.
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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