The market was caught in a bear trap on May 6 with the benchmark indices falling 1.6 percent. Selling was seen across sectors, with financial services, technology, metal, banks and auto being prominent losers.
The fear of faster policy tightening by US Federal Reserve and recession and inflation concerns raised by the Bank of England weighed on the sentiment. The Sensex fell nearly 900 points to 54,836, and the Nifty plunged 271 points to 16,411. The correction in the broader space was higher than that for benchmarks.
The Nifty midcap 100 index was down 1.8 percent and the smallcap 100 index declined 2.5 percent.
Stocks that were in action included Hero MotoCorp, Abbott India and Power Grid Corporation, which bucked the trend and were among the top five gainers in the futures & options segment. ITC was the fourth biggest gainer in the Nifty50.
Hero MotoCorp rallied 2.5 percent to Rs 2,563.35, Abbott India rose 2.2 percent to Rs 16,984, and Power Grid Corporation of India gained 2 percent at Rs 238.40. ITC climbed 1.8 percent to Rs 266.65.
Here's what Rajesh Palviya of Axis Securities recommends investors should do with these stocks when the market resumes trading today:
On the daily chart, the stock has rebounded sharply from Rs 2,146 and confirmed “double bottom” trend reversal pattern. In addition, the stock has confirmed higher top and higher bottom formation, which reconfirms bullish sentiments.
The buying momentum was observed from 20-day simple moving average (SMA) at Rs 2,306 and rebounded sharply. The daily “band Bollinger” buy signal reconfirmed positive bias.
The daily and weekly strength indicator relative strength index (RSI) is in a bullish mode along with positive crossover, which supports rising strength in the near term.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 2,800-2,850, with downside support at Rs 2,400-2,350.
The stock is in a down trend on the medium-term time frame but on the short-term chart, we observed strong accumulation within Rs 18,500-15,500, representing a sideways trend. Breakout on either side of the range will confirm further direction.
The upper range also coincides with the 200-day SMA (Rs 18,572), hence any decisive breakout above the same may lead to upside momentum.
The stock is sustaining below its 20, 50 100 and 200- day SMAs, which support bearish sentiment. The daily weekly and monthly strength indicator RSI is bearish, signalling the absence of strength.
Investors should wait and watch for trend reversal above Rs 18,500-18,600, and for existing long positions, Rs 16,000-15,500 level will remain critical support.
The stock is in a strong up trend across all the time frames as it sustains in higher tops and bottoms formation. It has also been well placed above 20, 50 , 100 and 200 days SMA which reconfirm bullish sentiments.
On the weekly time frame, the stock is scaling upwards within the "up-sloping channel" indicating an up trend. The daily, weekly and monthly strength indicator RSI is in a bullish mode, which signals sustained strength.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 285-300, with downside support at Rs 250-245 levels.
The stock is in a strong up trend across all time frames, as it continues to form a series of higher tops and bottoms. The stock is approaching an all-time high breakout level of Rs 241.
Recently, the stock recaptured its 20-day SMA and rebounded sharply.
The weekly Band-Bollinger Buy signal indicates increased momentum. The daily, weekly and monthly strength indicator RSI is in a bullish mode along with positive crossover, which supports strength in the near term.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 250-275, with a downside support zone of Rs 230-220.
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