The market corrected for the first time in last five straight sessions with the benchmark indices falling 1 percent on January 6, dented by weak global cues amid increasing expectations for rate hikes in the US after recent FOMC (Federal Open Market Committee) minutes and fast-rising COVID cases.
The BSE Sensex dropped 621 points to close at 59,602, and the Nifty50 slipped 179 points to 17,746. Nifty Midcap 100 and Smallcap 100 indices gained 0.13 percent and 0.21 percent respectively.
The selling pressure was seen in banking & financials, FMCG, IT, Metals and Pharma stocks, however, Auto stocks bucked the trend.
Stocks that were in focus include BGR Energy which was locked in 10 percent upper circuit to close at fresh 52-week high of Rs 107.55, and Thermax which hit a record high of Rs 1,948.70 before closing with 3.27 percent gains at Rs 1,898.80, while NBCC India which was the biggest gainer in the futures & options segment, rising 7.73 percent to Rs 50.20.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
On Thursday, the stock has rallied 8 percent. After a muted opening it quickly surpassed short term resistance level of Rs 48 with strong volume activity. Despite weak market conditions NBCC maintained its strong momentum throughout the day.
On the short term time frame, the stock has formed strong price volume breakout pattern. The texture of the pattern suggests breakout action will continue in the near term if stock succeeds to trade above Rs 48 level.
For the breakout traders, Rs 48 would be the sacrosanct level to watch out, and trading above the same we can expect uptrend continuation wave up to Rs 53-55.
On January 6th, the stock made yet another 52-week high of Rs 107.55. In this month so far, it rallied over 25 percent, sharp price surge post breakout surprised most of the traders.
On daily and weekly charts, the stock has formed breakout continuation pattern which is grossly positive for the BGR Energy Systems. However, on short term time frame, momentum indicators indicates stock is in to the overbought zone and high chances of quick short term price correction is not ruled out if stock succeeds to close below Rs 99.
For the next few trading sessions, Rs 99-100 could be the trend decider level for the bulls, and if it sustains above the same we can expect continuation of uptrend up to Rs 115. Further uptrend may also continue which could lift the stock to Rs 125.
On the flip side, dismissal of Rs 99 could possibly trigger quick short term correction up to Rs 84.
On the daily charts, the stock has formed expanding Triangle kind of formation. Post that formation, the stock is hovering in the range of Rs 1,650 to Rs 1,900.
Currently stock is witnessing non-directional activity perhaps, traders are waiting for the either side breakout.
For the bulls, Rs 1,950 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 2,050-2,150.
On the flip side, trading below Rs 1,780 may increase further weakness up to Rs 1,700-1,650.
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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