Indian market witnessed mild profit-taking at higher levels on Wednesday weighed down by muted global cues. The Nifty50 managed to hold on to 15,000 levels towards the close of the trade which is a positive sign for the bulls.
Among sectors, profit-taking was witnessed in banking, metal, and auto, whereas realty, healthcare, and power ended with decent gains. Amid all, the market breadth was inclined marginally on the positive side.
Stocks that were in focus include Relaxo Footwear, which closed with gains of over 12 percent, Praj Industries which rallied 7 percent, and Prince Pipes that rose above 10 percent.
Here's what Ruchit Jain, Senior Analyst- Technical and Derivatives, Angel Broking Ltd, recommends investors should do with these stocks when the market resumes trading today:
The stock is in an uptrend which can be seen by the ‘Higher Top Higher Bottom’ formation on the weekly and monthly charts.
Within this broader uptrend, the prices had consolidated in the last few months. Now, they have resumed the momentum with a breakout with high volumes.
Hence, traders with existing positions should continue to ride this trend and one could even look for fresh buying on dips.
The immediate support for the stock is placed in the range of Rs 970-960 while we could see a continuation of this rally towards Rs 1060 in the near term.
The stock has shown a stupendous rally in the last six months and the price up move has also been supported by good volumes.
In the last few weeks, the momentum has accelerated and we have not seen any significant price or even time-wise correction.
Hence, the momentum readings on the daily as well as the weekly chart are now trading in the overbought zone.
The immediate support for the stock is now placed around Rs 348 and thus the risk-reward for fresh long is not favourable.
It is advisable to wait for either a price or a time-wise correction which could then provide a better entry point. However, investors who are already long in this stock can continue to ride the trend by keeping a stop loss below the mentioned support.
Post listing in January 2020, the stock saw a price correction along with the broader market in March 2020. Prices then consolidated in a range for few months and started moving higher in August 2020.
Since then, there’s no looking back and the stock has continuously inched higher. The stock has delivered significant returns in this period and still, the trend continues to be positive.
Since the stock is in uncharted territory, predicting resistances looks difficult. Hence, holding positions with a trailing stop loss method would be advisable.
The immediate support for the stock is now placed around Rs 630 which could be used as a stop loss for existing longs.
Disclaimer: The views and investment tips expressed by 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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