Yet another volatile session finally settled with moderate losses on June 30, the monthly expiry day for June futures & options contracts. Technology, metal, auto, and realty stocks were under pressure, whereas buying was seen in select banking & financial services, and FMCG stocks.
The BSE Sensex fell 8 points to close at 53,019 yesterday, and the Nifty50 declined 19 points to 15,780. The broader space was also under pressure with the Nifty Midcap 100 and Smallcap 100 indices down eight-tenth of a percent and half a percent respectively.
Higher volatility seems to be the reason for ongoing consolidation, hence the same needs to decisively break below 20 levels for stability in the market. India VIX, which measures the expected volatility in the market, declined third of a percent at 21.84 levels.
Stocks that were in action and outpaced the broader space included Talbros Automotive Components which rallied 7.2 percent to Rs 497 and formed a bullish candle on daily charts with volumes much above average.
Sobha climbed 3.8 percent to Rs 577 and formed a bullish candle pattern on the daily charts for the second consecutive session with volumes far higher than average, while Eveready Industries India jumped 9.1 percent to Rs 331, the highest closing level since April 6 this year, and saw a robust bullish candlestick formation on the daily scale with above average volumes.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
The stock has rallied 9 percent on June 30. On Thursday, the stock opened with a positive note and quickly surpassed Rs 325, the short term resistance level with a strong volume activity. Despite tepid market conditions Eveready Industries India maintained its strong momentum throughout the day.
On the short term time frame, the stock has formed strong price volume breakout pattern. The texture of the pattern suggested breakout action will continue in the near term if stock succeeds to trade above Rs 325 level.
For the swing traders, Rs 325 would be the sacrosanct level and trading above the same we can expect uptrend continuation wave up to Rs 345-355.
After a long correction, the stock has formed double bottom formation. Post reversal formation, the stock comfortably trading above 20 days SMA (simple moving average Rs 530) which is broadly positive.
In addition, on weekly charts, it has formed long bullish candle and after a long time it succeeded to close above 50 days SMA (Rs 555).
For the bulls, Rs 550 or 50 days SMA would be the key level to watch out. Above the same, we could expect further uptrend rally up to Rs 625-650. On the flip side, trading below Rs 550 may increase further weakness up to Rs 535.
After a short term correction, the stock took the support near 200 days SMA (Rs 413) and reversed sharply. Post reversal, in this week so far, it rallied over 15 percent and it also formed long bullish candle on weekly and daily charts.
The texture of the charts is indicating strong possibility of continuation of uptrend wave in the near future.
For the trend following traders now, Rs 460 would be the key support level. Above which, it could move up to Rs 550-560. On the flip side, below Rs 460 uptrends would be vulnerable.
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