The market corrected for the first time after seven sessions on October 25, losing half a percent ahead of the expiry of October derivative contracts on Thursday.
The Sensex declined 288 points to 59,544 and the Nifty fell 74 points to 17,656. The Nifty Midcap 100 index gained half a percent and the smallcap 100 index slipped one-tenth of a percent.
The market breadth favoured the bears, as about five shares declined for every three advancing shares on the NSE.
Stocks that were in action and outperformed broader markets included BHEL, which rallied more than 7 percent to Rs 71, its highest closing since November 9, 2021. It formed a strong bullish candle on the daily charts with robust volumes. The stock has been making higher highs higher lows since June lows.
KEI Industries was also in focus, rising more than 6 percent to end at a record closing high of Rs 1,630. It formed a big bullish candle, which resembled a Bullish Engulfing pattern on the daily charts with higher volumes.
Punjab National Bank shares climbed 5 percent to Rs 43.3, their best closing since October 27, 2021 and formed a bullish candle on the daily charts. The stock was in an uptrend for the seventh straight session.
Here's what Vidnyan Sawant of GEPL Capital recommends investors should do with these stocks when the market resumes trading today:
KEI is trading near record high, maintaining strong momentum while forming higher tops, higher bottoms and following a bullish trendline.
The stock gave a breakout of the rounding bottom pattern in the previous session, indicating a continuation of the uptrend.
The stock also changes its polarity around the level of Rs 1,375, which confirms the uptrend.
It has come out of a broader range with the expansion of the Bollinger band, indicating rising volatility.
Directional movement index (DMI), plotted on the daily timeframe observed a positive crossover and ADX (average directional index) here being above 25 with a rising slope shows the tendency of the counter to trend.
Traders and investors should buy the stock for the target of Rs 1,820, with a strict stop-loss of Rs 1,450 on the closing basis.
The broader picture shows that the stock has been an underperformer with no clear trend since March 2020 lows.
In the latest trading session, it gave a breakout of the rounding bottom pattern, which indicates beginning of an up move.
The stock has an immediate resistance at around Rs 45, which was created by a gap that was accompanied by high volumes on October 2021.
Prices are trading above the prior swing high of Rs 41.65 (September 20, 2022), while the relative strength index (RSI) is still below the swing high, which does not confirm the intact up move.
Looking at the underperformance of the stock, we recommend traders and investors to exit the stock at every rise. The level of Rs 37–35 is the crucial support zone, which may act as a stop-loss.
After October 2021, BHEL has started to rise after retracing the 61.8 percent Fibonacci level of prior advance from Rs 18.40 (March 2020) till Rs 80.35 (October 2021).
The stock broke out from the rectangle pattern on August 29, 2022, indicating the continuation of the uptrend.
The stock has started to get into its higher high, higher low formation while sustaining above its variable support of 18 and 36-day exponential moving average (EMA).
The ratio charts versus the Nifty are placed orderly and indicate that the stock can continue its outperformance.
Traders and investors should buy the stock for the target of Rs 80.35 (52-week high), where a stop-loss of Rs 65 must strictly be implemented on a closing basis.
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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