The market fell sharply, but managed to recoup some of the losses in last hour of support-based buying on January 5. The hint of a likely continuity in aggressive stance by Fed officials in FOMC minutes to control inflation weighed on the sentiment.
Banking and financial services and technology stocks pulled the market down, but there was support by auto, FMCG, metal and pharma stocks.
The BSE Sensex declined more than 300 points to 60,353, while the Nifty50 slipped 51 points to 17,992 and formed bearish candle on the daily charts with long lower shadow.
The broader markets also showed recovery in last hour of trade and outperformed benchmark indices. The Nifty Midcap 100 index was up half a percent and the Smallcap 100 index ended flat with a positive bias.
Stocks that were in action and performed better than broader markets included BHEL which gained 3.5 percent at Rs 81.95 and formed long bullish candle on the daily charts with above average volumes with higher high higher low formation. The stock has seen a breakout of small downward sloping resistance trend line adjoining multiple touchpoints - December 5, December 9, 2022 and January 3, 2023.
Godrej Consumer Products shares gained 3 percent at Rs 916.5 and formed large bullish candle on the daily charts with strong volumes. In fact it has given a strong close above the median of previous large bearish candle of December 12. Also there was a breakout of downward sloping resistance trend line adjoining December 9, 2022 and January 3, 2023.
Max Financial Services jumped 3 percent to Rs 735.4 and formed long bullish candlestick pattern on the daily charts with above average volumes, with higher high higher low formation for third straight session. In fact, it has been in an uptrend after break out of long downward sloping resistance trend line adjoining September 20 and December 19, 2022, on January 3.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
The stock has shown a robust rally from the lower levels in the recent months. Moreover, there is a fresh breakout along with decent volume from the triangle chart formation. As a result, the comfortable close above its breakout zone suggest upward momentum to persist in the coming horizon.
For the bulls, Rs 80.5 is the important level to watch. And if it sustains in the near term, we can expect upward rally towards Rs 86-88. On the flip side, trading below 50-day SMA (simple moving average) or Rs 79 may increase further weakness up to Rs 77-76.
The counter is into a rising channel from last few sessions. Additionally, on the weekly and daily charts the stock has formed a Cup and Handle chart formation. Therefore, breakout move from the resistance zone for the bullish continuation rally is very likely to occur in the coming trading sessions.
For positional traders, Rs 900 would be the trend decider level. Trading above the same uptrend formation will continue till Rs 960-980. However, closed below Rs 900, traders may prefer to exit from trading long positions.
Post correction from the higher levels, the counter was trading in a rangebound mode. On the daily charts, the counter has formed higher bottom series and it has given the range breakout. Therefore, the closing above the resistance line indicates further bullish momentum to continue from the current levels.
For the trend following traders, Rs 715 would act as support level. Above the same, it could move up to Rs 750-770 levels.
On the flip side, below Rs 715 traders may prefer to exit from the position as it could slide further till Rs 700 zone.
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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
