The market continued its northward journey for the second straight session with the Nifty50 closing above the crucial 17,300 mark on October 17, following an uptrend in its global counterparts.
The BSE Sensex jumped nearly 500 points to 58,411 and the Nifty50 rose more than 100 points to 17,312, backed by banking & financial services, auto and select technology stocks.
On the broader markets front, the Nifty Midcap 100 and Smallcap 100 indices also gained strength but gains were lower than benchmark indices, rising 0.16 percent and 0.45 percent, respectively.
Stocks that were in action included Deepak Fertilizers and Petrochemicals Corporation which rallied 8 percent to Rs 966, the highest closing level since August 26 and formed large bullish candlestick pattern on the daily charts with robust volumes. In fact, it has seen a breakout of horizontal trend line adjoining multiple resistance points.
Canara Bank shares gained nearly 5 percent at Rs 237.4 and formed bullish candle on the daily charts with strong volumes which also saw a breakout of long horizontal resistance trend line adjoining several points.
Godfrey Phillips India was also in action, rising 7.5 percent to Rs 1,410.5, the highest closing level since January 27, 2020. It has seen formation of robust bullish candle on the daily charts, which engulfing previous day's red candle, with large volumes.
Here's what Vidnyan Sawant of GEPL Capital recommends investors should do with these stocks when the market resumes trading today:
Deepak Fertilizers and Petrochemicals Corporation
Looking at the broader picture while comparing with Nifty, the correction post February 2022 looks listless as Deepak Fertilizers did not get into Lower High, Lower Low formation. This shows the strong relative strength of the stock.
Prices in the latest trading session have given a breakout of rectangle pattern. The breakout was preceded by short fall in the pattern, this shows the enthusiasm of the crowd for the breakout.
The breakout is confirmed by the higher Volumes.
The stock has surpassed the upper Bollinger Band, indicating rise in the volatility for an up move.
RSI (relative strength index) plotted on the daily timeframe have shown a breakout that reflects the strong momentum built up in the underlying.
We recommend traders and investors to buy this stock for the target of Rs 1,200, where the stop-loss must be Rs 860 on the closing basis.
Godfrey Phillips has surpassed the swing high of Rs 1,253 (August 2022) while beginning Higher High, Higher Low formation.
The stock 2-week ago had given a breakout from the Double Bottom Pattern which indicated a beginning of trend on the upside.
Watching the Ratio chart versus Nifty, the breakout here points towards the continuation of its outperformance.
Prices are continuously hovering around upper Bollinger band indicating rising volatility of the prices for an up move.
We recommend traders to buy and accumulate this stock for the target of Rs 1,650 where the stop-loss must be Rs 1,250 on the closing basis.
Canara Bank is currently trading near its 52-week high level which tells that the stock already is in strong momentum.
Prices post the breakout from the Double bottom pattern on July 18, 2022 now have started to climb while taking support from the neckline of the above pattern.
The stock is currently trading above its key moving average of 18 and 50 days EMA (exponential moving average) which have acted as a variable support to the prices.
RSI on the Weekly as well as on the daily timeframe is rising and have sustained above 50 mark, confirms again that the stock has strong momentum built in.
We advise traders and investors to buy this stock with the stop-loss of Rs 217 on the closing basis for the target of Rs 270 levels.
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.
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