The market has gradually been crossing every hurdle, especially after the beginning of the recovery phase from 52-week lows, as bulls continued with strong hold at Dalal Street. The Nifty50 surpassed the 16,600 mark on July 21, closing 85 points higher at 16,605 and formed bullish candlestick pattern on the daily charts, continuing uptrend for fifth consecutive session.
Oscillators continued to show positive sentiment with the RSI (relative strength index) maintaining above 60 levels and Stochastic seems to be making positive crossover, while MACD (moving average convergence divergence) remained upward direction on the daily charts, indicating trend is up for the market.
The BSE Sensex rose more than 280 points to 55,682, while the Nifty Midcap 100 and Smallcap 100 indices sustained the uptrend, rising 1.4 percent and 0.77 percent on positive breadth.
Stocks that were in action and fared better than broader space included Tata Communications which surged 10 percent to close at Rs 1,077, the highest closing since May 2, forming bullish candle on the daily charts with significantly above average volumes and has been making higher high higher low since hitting multi-year lows in June.
Happiest Minds Technologies shares climbed 6.4 percent to Rs 970 and formed bullish candle on the daily charts with much above average volumes. It has seen a formation of higher high higher low for fourth consecutive session, making more than 17 percent up-move in four days.
ABB India was another stock that was in action on Thursday, rising 6.7 percent to Rs 2,772.75, the highest ever closing level and formed robust bullish candle with higher volumes on the daily charts.
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 over 10 percent on July 21. After a minor correction on last Wednesday, the stock opened with gap up successfully cleared the short term resistance of Rs 1,025. Post breakout it maintained strong momentum throughout the day on Thursday.
On the short term time frame, the stock has formed strong price volume breakout pattern. The texture of the chart indicating breakout action will continue in the near term if stock succeeds to trade above Rs 1,030 level.
For the breakout traders, Rs 1,030 would be the key level, and trading above the same we can expect uptrend continuation wave up to Rs 1,150-1,200.
After a long correction, the stock took the support near Rs 800 and bounced back sharply. In this week so far, it rallied over 15 percent. It also formed long bullish candle on weekly charts which is broadly positive.
We are of the view that, the short term texture of the stock is still in to the bullish side but due to temporary overbought situation we could see some profit booking at higher levels.
For the bulls now, Rs 1,000-1,035 would act as an immediate resistance zone. On the flip side, Rs 930-900 could be the key support levels for the positional traders.
Buying on dips and sell on rallies could be the ideal strategy for the positional traders. However, below Rs 900 uptrend would be vulnerable.
On last Thursday, the stock registered a fresh 52 weeks high of Rs 2,835. In this month so far the stock rallied over 20 percent. Technically, after Rs 2,500 breakout the stock has formed breakout continuation formation. The texture of the chart indicating uptrend formation is likely to continue in the near future.
For the trend following traders, now Rs 2,650 would be the trend decider level. Above which, it could move up to Rs 2,900-3,000.
On the flip side, strong possibility of quick correction is not ruled out, if it succeeds to trade below Rs 2,650. Below the same, it could slip till Rs 2,500-2,480.
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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