Bears turned stronger on January 4 and chased the benchmark indices down over 1 percent and wiped out all previous two-day gains in a single session. Banking and financial services, technology, metal, and auto stocks were the biggest drag.
The BSE Sensex fell more than 600 points to 60,657, while the Nifty50 declined nearly 190 points to 18,043 and formed a long, bearish candle on the daily charts but took support at the crucial 18,000 mark.
The broader markets also followed suit by correcting 1-odd percent, while the India VIX rise by 5.6 percent to 15.2 paved the way for bears.
Stocks that were in action and bucked the trend on Wednesday included Havells India which was the second biggest gainer in the futures and options segment, rising nearly 2 percent to Rs 1,149 and formed a bullish candle on the daily charts for the second straight session with above-average volumes.
There was a breakout of downward sloping resistance trend line adjoining December 1 and December 21 in the previous session and also the stock has seen a breakout of mother candle on higher side on Wednesday, indicating positive mood.
Rashtriya Chemicals and Fertilisers shares gained more than 3 percent at Rs 135 and formed bullish candle on the daily charts with strong volumes, recouping losses of previous two sessions. In fact, the bullish candle almost engulfed previous two bearish candles. Overall it has seen consolidation for fifth trading session after formation of robust bullish candle on December 28.
Grindwell Norton remained in focus, rising 2.6 percent to Rs 1,894 and formed bullish candle with making higher high higher low for third consecutive session. Also the stock has seen a breakout of downward sloping resistance trend line adjoining December 19, December 21, 2022 and January 3, 2023.
Here's what Jigar S Patel of Anand Rathi Shares & Stock Brokers recommends investors should do with these stocks when the market resumes trading today:
Rashtriya Chemicals and Fertilisers
Since last 6 months the said counter has made whopping return of 102 percent approximately. At current juncture, it is trying to make double top near Rs 140-143 levels.
Also, the volume is dropping as price is increasing which is an anomaly according to volume spread analysis (refer to the chart).
On indicator front, daily scale MACD (moving average convergence divergence) histogram has made negative divergence which is hinting towards temporary pause or possible pullback. One can book profit in the zone of Rs 140-143.
Fresh buy is not recommended.
After making the top of Rs 1,405 on September 2, 2022, the said counter has taken a beating of 27 percent approximately. At current juncture, Havells has made bullish alternate BAT pattern around Rs 1,100 level which is also its historical support.
Recently it broke its one-month-old trendline on daily chart with heavy volume thus indicating bullish stance in Havells (refer to the chart).
On indicator front, daily MACD has made has formed bullish divergence thus adding more confirmation for upside.
One can buy at CMP in small tranche and another around Rs 1,120 (if tested gain) with upside till Rs 1,200 and stop-loss at Rs 1,098.
Since last 4 months, the said counter has been making lower highs and lower lows which resulted into 27 percent cut in price. Recently it has made bullish AB=CD near its historical support of Rs 1,800-1,820 along with trendline violation on daily chart thus adding more confirmation of upside in coming sessions.
On indicator front, daily MACD histogram has formed bullish divergence thus adding more confirmation for upside.
One can buy at CMP in small tranche and another around Rs 1,840 (if tested gain) with upside till Rs 2,050 and stop-loss at Rs 1,799.
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