The market staged a smart recovery on February 3 on rally in banking & financial services, auto and select FMCG and technology stocks. Gains in select Adani group stocks and fall in oil prices also helped the sentiment.
The Sensex climbed over 900 points to 60,842, while the Nifty jumped more than 240 points to 17,854 and formed a bullish candle on the daily charts, with long lower shadow indicating support-based buying.
The broader markets, however, were under pressure on weak breadth. About two shares declined for every rising share on the NSE.
The Nifty midcap 100 index was down second-tenth of a percent and the smallcap 100 index four-tenth of a percent.
We have selected three stocks, which outpaced the broader markets on February 3, for trade spotlight.
Supreme Industries rallied over 3 percent to end at a record closing high of Rs 2,630 and formed a long bullish candle on the daily charts, with higher high formation for the second consecutive session.
Mahindra Lifespace Developers closed 9 percent higher at Rs 380, which was above its 50 exponential moving average (EMA) of Rs 370, which can act as support in the near term. It formed a long bullish candle on the daily charts with strong volumes.
AAVAS Financiers gained more than 7 percent to Rs 2,000 and formed a strong bullish candle on the daily charts, with significantly higher volumes. The single-day rally took the stock above 50 as well as the 100-day EMA.
Here's what Rajesh Palviya of Axis Securities recommends investors should do with these stocks when the market resumes trading today:
On the daily and weekly time frame, the stock is trending up, forming a series of higher tops and bottoms, indicating a bullish trend. The stock is well placed above its 20, 50, 100 and 200-day simple moving averages (SMAs), which reconfirms bullish sentiment.
On the weekly line chart, the stock confirmed "rounding bottom" formation at Rs 2,610. The rally was accompanied by rising volumes which denote increased participation. The daily, weekly and monthly strength indicator relative strength index (RSI) is in positive terrain, which signals rising strength across all the time frames.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 2,740-2,830, with a downside support zone of Rs 2,450-2,340.
Since September 2022, the stock has been in a downtrend, forming a series of lower top and bottoms but in the past couple of months, the stock is consolidating near multiple support zones of Rs 340.
With the action of the past couple of weeks, the stock has formed an "engulfing bullish" candle, a short-term trend reversal, however, a follow-up close above Rs 385 will confirm the pattern. Rising volumes near the support zone signal increased participation.
Investors should buy, hold and accumulate the stock with an expected upside of Rs 420-440, with support at Rs 340-330.
On the daily time frame, the stock saw a trend reversal, forming higher top and bottom that indicate positive bias. With a gain of 7 percent on February 7, the stock has also confirmed a "downsloping trendline" breakout at Rs 1,920 along with huge volumes, indicating increased participation.
The buy signal on the daily band Bollinger denotes increased momentum in the short term. Investors should buy, hold and accumulate the stock for an expected upside of Rs 2,160-2,280, with downside support at Rs 1,840-1,800.
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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