It was a great session for the market after a two-day correction, as the benchmark indices recouped all their previous day's losses and closed with nearly 1 percent gains on July 27. All sectors participated in the run with the Nifty Pharma, IT and Bank indices rising 1-2 percent.
The BSE Sensex rallied nearly 550 points to close a tad above 55,816, while the Nifty50 jumped more than 150 points to close at 16,642 and formed a Bullish Engulfing candlestick pattern on the daily charts, indicating the bulls came back in action.
The broader markets had a mixed picture as the Nifty Midcap 100 index gained more than one percent and the Smallcap 100 index closed flat. The market breadth was not strongly with bulls as about five shares gained against four falling shares on the NSE.
Stocks that were in action included Star Health and Allied Insurance Company which jumped nearly 9 percent to Rs 762.30, the highest closing level since February 11 and surpassed previous several resistance points with one big single candle. The index has formed large bullish candle on the daily charts with very high volumes, and the Bollinger Band also expanded on the upper side. On the weekly scale, there were back-to-back four large bullish candles formations with positive sentiment indicators.
Huhtamaki India jumped 8 percent to Rs 199.70, the highest closing level since February 8 and formed robust bullish candle on the daily charts with far higher than above-average volumes. The stock has been in a gradual uptrend, barring intermittent corrections, for more than one month.
Nuvoco Vistas Corporation shares climbed 5.5 percent to Rs 340, continuing uptrend for ninth consecutive session. It has been forming decent bullish candlestick patterns in last four straight sessions with higher low higher high formation and with above average volumes and closed at the highest level since May 4.
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:
Nuvoco Vistas Corporation has witnessed a very sharp correction of 35 percent between March 2022 and June 2022. Since then the stock is making N wave on the daily chart (see chart). On July 22, it gave a classic reversal from Alternate bullish Bat pattern with positive volume picking up which hints at further upside.
On the indicator front, daily MACD (moving average convergence and divergence) is giving bullish cross exactly near zero line along with daily RSI (relative strength index) bouncing from 45 levels indicating further upside till Rs 420 with plausible support seen at Rs 300.
One can hold (if already bought) and add (if considering fresh buy) at the current market price.
Star Health and Allied Insurance Company
On the daily chart, the counter is near resistance levels of approximately Rs 760. Over the last one month, the stock has seen 54 percent appreciation. If already holding position, then one should book some profits at current market price.
Last but not the least, fresh buying in the counter is not advisable at current market price, as volume is not in sync with price action (volume is decreasing along with increase price action).
What a classic setup we are having at Huhtamaki, precise Bullish BAT pattern which got extended till 1.13 ratio on the weekly chart with N-wave completed near the potential reversal zone of Rs 180-190.
At the current scenario, weekly RSI (relative strength index) has made complex structure near oversold zone which is also complemented by double bottom near PRZ (potential reversal zone) denoting positive momentum in counter.
One should buy this counter with upside target of Rs 250 and good support is seen at Rs 175.
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