The market continued its uptrend for the fourth consecutive session, tracking positive global cues and FII buying binge. Fall in oil prices, July auto sales data and strong GST collection for July also lifted sentiment.
The benchmark indices closed at fresh three-month high. The BSE Sensex rallied nearly 550 points to 58,115, and the Nifty50 climbed 182 points to 17,340, while the buying was also seen in broader space on strong breadth.
The Nifty Midcap 100 index jumped 1.7 percent and Smallcap 100 index rose 1.8 percent as about three shares advanced for every share declining on the NSE.
Nifty Auto was the leader with more than 3 percent gains, followed by Bank and Metal with each rallying more than 1 percent.
Stocks that were in action included Rain Industries which jumped 8.6 percent to Rs 191.35, the highest closing level since April 11, continuing the uptrend for the fourth straight session. The stock has formed a bullish candle on the daily charts with significantly higher volumes. It has been in an uptrend since July 18, especially and immediately after the formation of a hammer candlestick pattern, barring intermittent correction.
Mahindra & Mahindra was the second biggest gainer in the Nifty50 as well as the Nifty Auto index, rising 6.3 percent to end at a record closing high of Rs 1,237.75 and formed a large bullish candle on the daily charts with far above-average volumes.
Metro Brands shares also ended at record closing high of Rs 737.2 with 15.2 percent gains. More importantly it has seen a healthy gap up opening on Monday and that opening price was well above previous high of Rs 673 (January 18). It has formed robust bullish candle on the daily charts with very high volumes.
Here's what Vidnyan Sawant of GEPL Capital recommends investors should do with these stocks when the market resumes trading today:
By looking at the higher time frame charts, we can notice that the stock has shown a strong bounce on the upside from the 61.8 percent (Rs 131.85 level) Fibonacci level of the prior advance from Rs 44.75 (March 2020) to Rs 272.75 (August 2021). Around the level of Rs 131.85, we can also spot change in the polarity by the prices.
On the daily chart, we can spot that prices have started to form the higher high, higher low pattern which indicates that the prices are reversing on the upside from its prior down trend.
Prices on daily time frame have also sustained above 50 days SMA (simple moving average) which was acting as a variable support for the prices, this confirms the trend reversal to the upside.
One can observe that the increase in the prices are supported by increasing volumes. This implies the demand is pushing the price high.
RSI (relative strength index) plotted on the daily timeframe has shown a breakout which reflect that the stock has strong momentum in its prices.
We recommend the traders and investors to buy and accumulate the stock for the target of Rs 230 followed by Rs 250 level with a stop-loss at Rs 175, strictly on the closing basis.
On a daily scale chart, we can spot that prices of M&M are in a clear uptrend forming higher high, higher low formation, whereas prices are trading at all-time high level which tells that the stock is already in a good momentum.
Prices in the latest trading session (Monday) have given a breakout from rectangle pattern which suggest that prices may continue moving higher in the direction of breakout.
We can see volumes picking up which shows the interest of the crowd in the existing trend and the breakout as well is followed by high volumes in the current session.
Prices have closed above upper Bollinger band in the latest trading session, indicating increase in the volatility for the upside movement.
RSI plotted on the daily timeframe have sustained above 50 mark, which again tells that the stock prices are in momentum.
We recommend the traders and investors to hold the stock for the target of Rs 1,400 with a stop-loss of Rs 1,150, strictly on the closing basis.
Metro Brands had been moving in sideways action from January 2022 till July 2022 in the form of rectangle pattern, ranging between Rs 505-635 Levels.
Prices in the latest trading session have given a breakout of the rectangle pattern, indicating a beginning of an uptrend. The pattern from May 2022 witnessed a short fall in the prices which indicated increase in the curiosity by the crowd for the breakout.
The breakout of the pattern in the latest session was followed by a Gap and high Volumes, through which we can imply that the stock has bullish undertone in the prices.
The RSI Plotted on daily time frame is rising and have sustained above 60 mark, which tells that the breakout is followed by higher momentum.
We recommend traders and investors to buy and accumulate the stock for the target of Rs 845, with a stop-loss of Rs 680, on the closing basis.
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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