The market faced severe selling pressure with the benchmark indices falling 1 percent on December 21, weighed down by global recession fears and worries over rising Covid cases globally.
The BSE Sensex plunged more than 600 points to 61,067, while the Nifty50 jumped nearly 190 points to 18,199 and formed Bearish Engulfing candlestick pattern on the daily charts, indicating bears tightened control over Dalal Street.
The similar trend was also seen in broader markets as the Nifty Midcap 100 and Smallcap 100 indices fell 1.6 percent and 2.2 percent respectively.
India VIX, the fear index jumped 13 percent to 15.56 level, from 13.78 level, making the trend more favourable for bears.
Stocks that were in action and bucked the trend on disappointing day included Glenmark Pharma which was the biggest gainer in the futures and options segment, rising nearly 8 percent to Rs 440 and formed robust bullish Engulfing candlestick pattern on the daily charts with healthy volumes.
In fact, the bullish candle was so strong that it engulfed previous four negative candles. The stock has seen a breakout of two horizontal resistance trend lines adjoining November 15 and December 16, as well as November 11 and December 19.
Biocon shares gained 3.5 percent at Rs 271 and formed long bullish candle on the daily charts with robust volumes. Also there was Morning Star kind of pattern formation, which is generally called as a bullish reversal pattern formed in an downtrend.
LTIMindtree was also in focus, rising 1.4 percent to Rs 4,424 and formed decent bullish candle on the daily charts with above average volumes. The stock has seen a breakout after consolidation in previous three straight days. Also there was a breakout of two horizontal resistance trend lines adjoining December 13 and December 19, as well as December 12 and December 16, while it has seen a breakout of downward sloping resistance trend lines adjoining December 14 and December 20, this year.
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:
Glenmark Pharma has observed a steep fall of 49 percent between July 2021 and June 2022. Since then the stock has been making higher highs and higher lows structure thus confirming its uptrend.
For the last 2 months, the said counter has maintained its price above 200 DEMA (days exponential moving average) OHLC (open high low close) band which is an indication of more strength coming in.
On the indicator front, weekly RSI (relative strength index) has taken support near 50 levels and rebounded from there along with weekly MACD (moving average convergence divergence) approaching the zero line denoting further upside in Glenmark.
One can buy at current market price (Rs 440) with upside expected till Rs 500, with a stop-loss of Rs 410.
On November 21, 2022 the said counter made a high of Rs 295 and since then it started free fall to Rs 259 resulting in a 12 percent cut in price. At the current juncture, Biocon has made a bullish BAT pattern near its historical support of Rs 260 which is also one of the double bottoms formed in recent times with the daily RSI bullish divergence.
Last but not least volume has picked up from lower levels which is a sign of early reversal in the counter.
One can immediately buy at current market price (Rs 271) with an upside target of Rs 300 with plausible support at Rs 256.
LTIMindtree has observed free fall after registering the top of Rs 5,360 on November 15, 2022 resulting in a 21 percent drop in price. At the current juncture, the said counter has stabilized near Rs 4,300 mark.
On a daily scale, it has made a bullish AB=CD pattern near historical support of Rs 4,250-4,350 along with a Bullish Hammer confirming an early reversal in the counter.
Even volume from lower levels is rising further complementing the bullish reversal in the counter. (refer to the chart)
One can buy with an upside target of Rs 4,700 with a stop-loss of Rs 4,288.
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