Indian markets closed lower for the second consecutive day on Thursday following muted global cues. Nifty50 fell more than 100 points to close below 15000 while the S&P BSE Sensex plunged over 300 points.
Sectorally, buying was seen in realty, capital goods, and consumer durable while selling pressure was seen in metals, oil & gas, banks as well as the public sector.
Stocks that were in focus include HFCL which rallied over 6 percent to hit a fresh 52-week high, JustDial which rose nearly 9 percent, and Ruchi Soya Industries that closed with gains of 10 percent.
Here's what Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities Ltd, recommends investors should do with these stocks when the market resumes trading today:
HFCL: Rally to continue
The stock has rallied over 65 percent so far in May. On May 20, HFCL Ltd made a fresh 52-weeks high of Rs 45.40, and after an extremely strong intraday session, the stock managed to close above Rs 44 resistance mark, which is broadly positive.
The important thing is the price volume activity. The incremental volume activity post the breakout clearly indicates high chances of a further uptrend from current levels.
On the daily and weekly charts, the stock has formed a strong promising price volume uptrend continuation formation.
For the trend following traders, Rs 40 and 38 would be the key levels to watch out for. The overall chart structure suggests that if it sustains above the same, breakout continuation texture is likely to continue up to Rs 49-53.
Since the last couple of months, the stock has witnessed price correction. The stock corrected over 25 percent from the 52-weeks high. On Thursday, after a strong opening, the stock rallied over 10 percent.
The sharp intraday price reversal formation near the important retracement level indicates short term uptrend.
In addition, the stock is consistently taking support near Rs 725 and a strong reversal formation with incremental volume activity suggests a pullback rally is likely to continue in the near future.
For the positional traders, Rs 725 should be the strong support level. Above the same, uptrend texture will continue up to Rs 850-920.
Ruchi Soya: Exit if it goes below Rs 850
The stock rallied over 33 percent so far in May, and the important point to note is that the stock not only surpassed its previous resistance level of Rs 800 but comfortably managed to sustain above the same. The sharp price volume surprised most of the traders.
On the daily and weekly, the charts stock has formed a breakout continuation formation which is grossly positive for Ruchi Soya.
However, in the short-term time frame, momentum indicators hint that the stock is in an overbought zone and there are high chances of a quick short-term price correction which can’t be ruled out if it trades below Rs 850.
For the next few trading sessions, Rs 850 should be the trend decider level for the bulls, and if the stock sustains above the same then we can expect the uptrend to continue till Rs 980.
Further, the uptrend may also continue which could lift the stock up to Rs 1050. On the flip side, a close below Rs 850 could fuel selling pressure and in that case, traders may prefer to exit out from trading long positions.
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