The Union Budget has given a strong push to the market with Nifty surging more than 300 points intraday, but the sell-off in later part of the day in Adani group, banks and life insurance stocks erased all those gains on Budget day.
The benchmark indices ended mixed with the BSE Sensex rising over 150 points to 59,708, while the Nifty50 fell 46 points to 17,616 and formed bearish candle on the daily charts with long upper and lower wicks, which resembles High Wave type of pattern, indicating extreme volatility in the market.
The broader markets corrected more than frontline index on weak breadth. The Nifty Midcap 100 index declined nearly 1 percent and Smallcap 100 index was down 1.2 percent as about three shares declined for every advancing share on the NSE.
Stocks that performed better than broader markets included Amara Raja Batteries which climbed nearly 5 percent to Rs 594 and has seen formation of long bullish candle on the daily charts with higher high higher low formation, with above average volumes. The stock has seen a breakout of downward sloping resistance trend line adjoining highs of December 22, 2022 and January 27, 2023. Also it closed above all short term and long term moving averages (50, 100 and 200 DEMA - days exponential moving average).
Gujarat Gas was also in action, rising more than 3 percent to Rs 472 and formed bullish candle on the daily charts with long upper shadow indicating profit booking at higher levels. The volume was quite high, while there was a breakout of downward sloping resistance trendline adjoining highs of December 21, 2022 and January 25, 2023, indicating positive mood among participants.
KEI Industries shares gained nearly 3 percent to end at record closing high of Rs 1,661 and formed bullish candle on the daily timeframe with long upper and lower shadows, with above average volumes. It has seen higher high higher low formation for fourth consecutive session.
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:
At the current juncture, KEI is struggling near its historical resistance zone of Rs 1,650-1,670. Moreover, in the previous trading session, it displayed a Shooting Star-like structure exactly at mentioned resistance zone. Volume is not rising, the price is rising which is an anomaly with respect to volume spread analysis. In other words, volume is not in sync with price action.
From the indicator perspective, daily MACD (moving average convergence divergence) is looking overstretched thus hinting towards loss of upside momentum.
One can book profit in the range of Rs 1,645-1,665. No Fresh longs are advised as of now.
Since the last couple of months, the said counter has corrected almost 18 percent and currently, it has made nice near Rs 450-455. Buying volume is gradually increasing from lower levels thus indicating bullish momentum in the coming few sessions.
From the indicator perspective, on a daily scale of MACD histogram and RSI bullish divergence was seen thus confirming the bullish stance in the counter.
One can buy in the range of Rs 468-473 with a target of Rs 520 and a stop-loss of Rs 445 on a daily close basis.
Though the said counter looks lucrative at current levels, one needs to pay close attention that Amara Raja is trading in a tight range of Rs 560-600.
One needs to wait for a clean breakout above Rs 600 and its sustainability above it for a couple of sessions. So wait and watch as of now in Amara Raja.
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