The market after initial volatility gained strength and extended the uptrend for the Nifty50 to climb above 16,400 levels in the afternoon, but the sell-off in the last hour wiped out 200 points gains from day's high and the index settled with moderate losses on May 23, raising question over sustainability and stability.
The Nifty50 fell 51 points to 16,215 and formed a bearish candle on the daily charts, while the BSE Sensex dropped 38 points to 54,289.
The market breadth was also weak as three shares declined for every two advancing shares on the NSE, resulting into a negative close for the broader space. The Nifty Midcap 100 and Smallcap 100 indices fell 0.35 percent and 0.8 percent respectively.
The volatility index remained above 20 mark, inching up a bit by 1.28 percent to 23.40 levels which, experts feel, is still indicating a favourable market for bears and discomfort for bulls.
The selling pressure in HDFC twins, ITC, Reliance Industries, and Tata Steel weighed down the market, however, the buying in auto, technology, private banks stocks and HUL limited losses.
Stocks that were in action included JSW Energy which rallied 5.8 percent to Rs 310.40 on Monday and jumped 26 percent after hitting August 2021's low on May 13; Easy Trip Planners which gained 4.92 percent at Rs 455.35 on Monday and jumped 33 percent from May 12; and Adani Power which was locked in 5 percent upper circuit at Rs 327.85 on Monday, and surged 35 percent from May 12.
Here's what Malay Thakkar of GEPL Capital recommends investors should do with these stocks when the market resumes trading today:
On long term charts, Easy Trip is moving with higher highs and higher lows formation since its listing in March 2021.
In the recent correction, the stock took support at the CIP (Change in Polarity) zone of Rs 345-355 and bounced sharply from the same levels.
Throughout the uptrend, the stock has been taking support and bouncing off from the 20 weeks SMA (simple moving average - Rs 341). In the current week, the stock has broken above swing high of Rs 441 with a bullish candlestick formation.
We advise traders and investors to continue holding the stock and expect upside towards Rs 492 followed by Rs 533 levels.
On the downside, Rs 405-410 zone will act as a support for the counter.
Adani Power is moving in a strong uptrend since March 2022. The up move in prices has been backed with strong volumes indicating participation in the counter.
In the previous week, the stock formed a Bullish Marubozu candle on the weekly charts indicating bullish sentiment in the counter.
The MACD (moving average convergence divergence) indicator has given a Bullish crossover indicating bullish momentum.
We recommend traders and investors to continue holding the stock for upside towards Rs 358, and a break above which can open upside towards Rs 390 levels. Rs 300 level on the downside would act as a strong support for the stock.
After a deeper correction, JSW Energy took support at Rs 240 level and has bounced sharply in the last week. On Monday, the stock has seen good price volume action and has managed to recapture above the 20 days SMA (Rs 294).
The MACD indicator has given a Bullish crossover indicating bullish momentum in the underlying.
We recommend investors to continue holding the stock for upside towards Rs 335 followed by Rs 355 levels. Rs 290-295 zone would act as an important support on the downside.
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