Bears charged again and attacked bulls in full force, pulling down the benchmark indices very sharply on May 19 as growth concerns and inflation worries rattled global counterparts.
The BSE Sensex fell more than 1,400 points or 2.6 percent to 52,792, and the Nifty50 plunged over 400 points or 2.6 percent to 15,809, continuing downtrend for second consecutive session, while the broader markets also traded in line with the benchmarks, with the Nifty Midcap 100 and Smallcap 100 indices declining 3 percent and 2.7 percent, respectively.
The volatility returned to over 25 levels again, which also strengthened bears and indicated further volatile swings in the market going ahead. India VIX, the fear index jumped 10.14 percent to 24.56 levels.
Stocks that were in action and bucked the market trend included Rashtriya Chemicals and Fertilisers which jumped 3.15 percent to close at Rs 96.7 on Thursday and rallied 18 percent in the last five straight sessions; Caplin Point Laboratories which surged nearly 8 percent to Rs 800.5 and gained 21 percent in last five straight sessions; and CARE Ratings which jumped nearly 4 percent to Rs 426.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
Rashtriya Chemicals and Fertilisers
After a short-term correction, the stock took the support near 200 days SMA (simple moving average) and bounced back sharply. In this week so far, the stock rallied over 18 percent. On last Thursday, despite weak market conditions, the stock rallied nearly 3 percent.
On daily and intraday charts, the stock is holding uptrend continuation formation and it also formed long bullish candle on weekly charts which supported further uptrend from the current levels.
For the trend following traders 92 or 50 days SMA would be the key levels to watch out for. The overall chart structure suggests if the stock sustained above the same then the uptrend texture is likely to continue till Rs 100-110. Below Rs 92, uptrends would be vulnerable.
On the daily and weekly charts, the stock has formed expanding triangle kind of formation. Post short term correction, the stock bounced back sharply and rallied over 10 percent.
On the daily charts, the stock has formed long bullish candle which is broadly positive. But at the same time, the stock is consistently witnessing profit booking near 200 days SMA. The medium term texture of the stock is non-directional activity perhaps, traders are waiting for the either side breakout.
For the bulls, Rs 810 or 200 days SMA 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 860-885.
On the flip side, trading below Rs 740 or 50 days SMA may increase further weakness up to Rs 700-670.
After a medium-term correction, on last Thursday, the stock bounced back sharply, rallied over 3 percent. However, in this month so far, it is corrected over 11 percent.
From the last couple of weeks, the stock has consistently been trading below 20 and 50 day SMA, and on daily charts, it has maintained correction continuation formation.
The short-term structure is still in to the downside and Rs 460 and Rs 475 would be the immediate resistance area for the CARE Ratings.
On the flip side, Rs 405 would be the immediate support level. Fresh round of sell off is not ruled out if the stock succeeds to close below Rs 405. Below which it could the hit the level of Rs 390-380.
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