The market on June 23 recouped more than half of its previous day's losses aided by auto, banks, FMCG, IT, and pharma stocks. The BSE Nifty50 rallied more than 140 points to 15,557 and the BSE Sensex climbed over 400 points to 52,266 following positive Asian cues.
The broader markets also joined the rally with the Nifty Midcap 100 and Smallcap 100 indices rising 1.2 and 1.3 percent respectively. The market breadth was positive as more than two shares gained for every declining share on the NSE.
India VIX, which measures the expected volatility in the market, also cooled down by two percent to 20.88 levels, helping bulls on Thursday, but stability is expected only if the volatility falls below 20 levels.
Stocks in focus that outperformed the broader markets included Spandana Sphoorty Financial which rallied nearly 20 percent to Rs 398.55. In fact, after hitting its lowest closing level on June 20, the stock gained 35 percent in three straight sessions.
MTAR Technologies gained nearly five percent to close at Rs 1,364. After hitting September lows on last Friday and falling 48 percent from all-time closing high, the stock has been on a northward trajectory and gained in three out of four days this week.
Nykaa gained 5.6 percent to Rs 1,432. After hitting its all-time closing low in May, the stock has been rangebound for more than a month now.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
After a medium term correction, the stock took support near Rs 300 and bounced back sharply. In this week so far, it has rallied 23 percent. The promising pullback rally indicates further upside from current levels.
In addition, on daily and weekly charts, the stock has formed a long bullish candle that also supported short term uptrend. For trend-following traders, Rs 375 would be key support levels.
And if the stock manages to trade above the same, we can expect continuation of uptrend wave up to Rs 425-435. However, below Rs 375 the uptrend would be vulnerable.
In this quarter so far, the stock has corrected over 20 percent. On daily and weekly charts, it consistently formed lower top series formation which is largely negative.
The short term texture of the stock is still in to the weak side and fresh pullback rally is possible only after Rs 1,400 breakout.
We are of the view that, as long as it is trading below Rs 1,400 or 20 day SMA (simple moving average), the correction wave is likely to continue.
Below which it could retest the level of Rs 1,300-1,270. On the flip side, if the stock succeeds to close above 20 day SMA or Rs 1,400, then continuation of pullback rally is likely to continue till Rs 1,450-1,500.
After a medium term correction, the stock is hovering within the range of Rs 1,300 to Rs 1,540. Technically, the short term texture of the stock is non directional and we are of the view that the rangebound activity is likely to continue in the near future.
For short term trades, Rs 1,300 and Rs 1,540 are important levels to watch out for. Below Rs 1,300 the stock could slip till Rs 1,250-1,220.
On the flip side, Rs 1,540 would be the key breakout level for bulls, above which the stock is likely to hit the level of Rs 1,600-1,625.
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