The market staged a stellar performance on August 30, the last trading day of the month, with the benchmark indices registering more than 2.5 percent driven by buying across sectors, and significant FII inflow given the India's resilient economy compared to global peers.
The BSE Sensex spiked more than 1,500 points to 59,537, and the Nifty50 jumped nearly 450 points to 17,759 and formed robust bullish candle on Tuesday.
The strong momentum was also seen in broader space with the Nifty Midcap 100 and Smallcap 100 indices climbing 2 percent and 1.3 percent respectively.
The volatility also cooled down, supporting the market momentum. India VIX, the fear index fell 5.66 percent to 18.7 levels.
Stocks that were in action included JSW Energy which jumped more than 7 percent to Rs 341 and formed strong bullish candle on the daily charts with robust volumes. Also the stock settled above the April 28th closing when there was a Evening Star kind of pattern formed and since then the stock had started falling. Generally Evening Star is a bearish reversal pattern.
Force Motors rose 7.5 percent to Rs 1,302, the highest closing level since January 21 and formed large bullish candlestick pattern on the daily charts. Also the stock has seen a break out of long downward sloping resistance trend line adjoining January 18 and August 17.
Paras Defence and Space Technologies jumped nearly 6 percent to close at Rs 715.65, continuing uptrend for fifth consecutive session. On last both days, there was strong bullish candlestick pattern formation on the daily charts with healthy volumes.
Here's what Ruchit Jain of 5paisa recommends investors should do with these stocks when the market resumes trading today:
This stock has recently given a breakout from a falling trendline resistance and its 200-day EMA (exponential moving average) resistance. Post breakout, we saw a ‘Higher Top Higher Bottom’ formation and the volumes were also higher. The stock is trading above its 20 days EMA as well and hence, the stock could continue its upmove.
However, the momentum readings are approaching the overbought zone and hence, one should look to buy on declines when the readings cool-off. The immediate support for the stock is placed around Rs 1,240 while resistance will be seen around Rs 1,375.
The stock has seen a long consolidation phase after a price-wise correction in the month of November 2021. However, the stock has again witnessed a buying interest in last couple of trading sessions. The price upmove has been supported by good volumes and the stock is on a verge of breakout from the falling trendline resistance.
Hence, the stock could see a positive momentum is it is able to sustain above Rs 720. On the higher side, it could then rally towards the previous swing highs of Rs 758 and Rs790. On the flipside, Rs 650-630 range would be seen as the immediate support.
Post the recent price wise correction, the stock has resumed its uptrend as we have seen a ‘Higher Top Higher Bottom’ structure from the recent swing lows.
The upmove has also been supported by good volumes while the RSI (relative strength index) oscillator is hinting at a positive momentum.
The 20 DEMA is the immediate support for the stock which is placed around Rs 305 while resistances are seen around Rs 360 and Rs 385.
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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