The market snapped a two-day winning streak despite positive global cues as most sectors closed in the red with moderate losses on August 25, the expiry day for monthly futures & options contracts.
The BSE Sensex fell more than 300 points to 58,775 yesterday, and the Nifty50 declined 83 points to 17,522, while the broader space outperformed benchmark indices as the Nifty Midcap 100 index dipped 0.06 percent and Smallcap 100 index gained half a percent.
Rising volatility also seems to have caused selling pressure on Thursday. India VIX, which measures expected volatility in the market, increased by 6.18 percent to 19.57 levels.
Stocks that were in action and performed better compared to broader markets included L&T Finance Holdings which rallied 7 percent to Rs 80.3 and formed a large bullish candle on daily charts with strong volumes, continuing uptrend for the third consecutive session. It was the second largest gainer in the futures & options segment.
Crompton Greaves Consumer Electrical climbed more than 5 percent to Rs 410 and saw the formation of a bullish candlestick pattern on the daily charts with above average volumes. It closed above the previous swing highs we have seen in more than a month. Also there was a breakout of long downward sloping resistance trend line adjoining October 1, 2021 and August 19, 2022.
United Spirits jumped 5 percent to Rs 816 and reported a strong bullish candlestick pattern with robust volumes on the daily charts after high wave candles formation in the previous two trading sessions.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
On last Thursday, the stock rallied over 10 percent intraday. However, after a morning rally, it witnessed some profit booking at higher levels. On daily charts, it has formed a strong price volume breakout formation. It also formed a bullish candle on daily and weekly charts.
The strong price volume activity indicates further uptrend from current levels. Technically, as long as it is trading above Rs 77 or 200 day SMA (simple moving average) the uptrend wave is likely to continue, above which, it could move up to Rs 85-88.
On the flip side, traders may prefer to exit long positions if it succeeds to trade below Rs 77 or 200 day SMA.
Crompton Greaves Consumer Electrical
In this quarter so far, the stock has rallied over 20 percent. On last Thursday, despite tepid market conditions, the stock rallied over 5 percent and formed a long bullish candle on daily charts.
A strong price volume range breakout formation indicates further uptrend from current levels.
For swing traders now, Rs 400-397 could be the key level to watch. If the stock manages to trade above the same, we can expect an uptrend continuation wave up to Rs 425-430 whereas below Rs 397 uptrends would be vulnerable.
On daily charts, the stock has formed a double bottom formation. After that formation, the stock bounced back sharply. On last Thursday it rallied over 5 percent. However, the short term texture of United Spirits is still non-directional.
Perhaps, traders are waiting for a breakout confirmation. For the bulls, Rs 845 would be an important level to watch. And if the stock manages to close above the same, we can expect a quick uptrend rally towards Rs 860-870.
On the flip side, trading below Rs 800 may increase further weakness up to Rs 750.
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