The market continued its southward journey for third straight session with the Nifty50 closing at six-week low on December 22 as Covid concerns and hawkish comments by RBI in its recent policy minutes dented the sentiment.
The BSE Sensex fell more than 240 points to 60,826, while the Nifty50 declined over 70 points to 18,127, the lowest closing levels since November 10 and formed bearish candle on the daily charts with lower high lower low formation.
The broader markets also followed similar path with the Nifty Midcap 100 index declining 0.9 percent and Smallcap 100 index falling 1.6 percent.
Most of sectors closed in red with auto, metal, PSU bank, and realty indices being the major losers.
Stocks that outperformed broader markets included Jubilant Foodworks which gained 2.4 percent. The stock settled at Rs 534 apiece, the highest closing since December 9, and formed long bullish candle on the daily charts with above average volumes, making higher high higher low formation for second consecutive session.
Shares of Jyothy Labs gained 1.7 percent at Rs 203 apiece and formed bullish candle on the daily charts with long upper shadow, indicating profit booking at higher levels, with healthy volumes. In fact in the beginning of day, the stock had formed robust bullish engulfing kind of pattern, which engulfed all its previous negative candles, rising 9 percent, but as the day progressed the profit booking stepped in at higher levels and finally ended with just 1.7 percent gains.
Wockhardt was also in action, rising more than 3 percent to Rs 236 apiece and formed long bullish candle on the daily charts with solid volumes, making higher highs for fourth consecutive session, especially after high wave kind of pattern formation in previous session. The stock has seen a breakout of small downward sloping resistance trend line adjoining December 1 and December 21 this year.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
After a short term correction, the stock took the support near 50-day SMA (simple moving average) or Rs 200 and reversed sharply. On last Thursday the stock witnessed a volatile price action.
Currently the stock is witnessing non directional activity perhaps, traders are waiting for the either side breakout.
For the bulls, Rs 212 would be the important breakout level to watch. And if, the stock manages to close above the same, we can expect quick uptrend rally towards Rs 220-225.
On the flip side, trading below 50-day SMA or Rs 200 may increase further weakness up to Rs 195-190.
In this week so far, the stock rallied over 7 percent. Post short term correction, it took the support near Rs 220 and reversed. After a long time, the stock succeeded to trade above 20 and 50-day SMA (simple moving average) or Rs 230 and Rs 235 which is broadly positive.
A premising reversal formation and long bullish candle on weekly charts indicating continuation of uptrend in the near future. For positional traders, Rs 225 would be the trend decider level.
Trading above the same uptrend formation will continue till Rs 250. However, closed below Rs 225, traders may prefer to exit from trading long positions.
After a long correction, on last Thursday the stock bounced back, and despite tepid market conditions it rallied over 2 percent. However, the short term texture of the stock is still in to the weak side.
We are of the view that, as long as the stock is trading below 20-day SMA (simple moving average), the weak formation is likely to continue.
For bulls now, Rs 522 would be the immediate support level, above which the pullback rally is likely to continue till Rs 540-545.
On the flip side, fresh round of selling possible only after dismissal of Rs 522, below which it could slip till Rs 515-510.
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