The market rebounded after two-day losses and managed to recoup some of those losses on January 23, tracking positive global cues. The uptrend in most of sectors, barring metals, aided rally in benchmark indices, but the breadth tilted in favour of sellers which resulted into mixed close for broader markets.
The BSE Sensex rallied more than 300 points to 60,942, while the Nifty50 climbed over 90 points to 18,118. The index has formed Long Legged Doji pattern, signalling indecision among bulls and bears, and raising possibility of trend reversal.
On the broader markets front, the Nifty Midcap 100 index gained little more than half a percent and Smallcap 100 index closed flat with negative bias.
Stocks that were in action included Torrent Power which jumped nearly 7 percent to Rs 491 and formed robust bullish candle on the daily charts with strong volumes. Momentum oscillator RSI (relative strength index 14) with above 50 level is positive indication for the stock. It has seen a breakout of downward sloping resistance trend line adjoining highs of December 5, 2022 and January 18, 2023. It got back above short term exponential moving averages (EMA 9 and 21-day), but still below long term moving averages (50, 100 and 200 DEMA). The stock has seen a formation of Morning Star kind of candlestick pattern, a bullish reversal pattern, after losing around Rs 100 in last approximately one-and-half-month period.
Coforge remained in an upward direction for sixth consecutive session, rising more than 6 percent to Rs 4,359, the highest closing level since April 8, 2022. The stock has formed large bullish candle on the daily charts with significantly higher volumes, making higher high higher low for second straight session. The consistent rally has taken the stock above all important EMAs. Bollinger band also expanded on both sides, indicating rising price volatility.
GAIL India shares hit Rs 100 mark after a long time and rallied more than 3 percent to Rs 102.25, the highest closing level since May 20, 2022 and has formed long bullish candle on the daily charts with strong volumes, with higher high formation for fifth consecutive session. With Monday's rally, the stock started trading well above all short term and long term exponential moving averages, getting fully into momentum.
Here's what Vidnyan Sawant of GEPL Capital recommends investors should do with these stocks when the market resumes trading today:
Coforge, now has started to get into higher high, higher low formation which tells suggest the beginning of the trend to the upside.
The stock's price has recently surged above Descending Triangle pattern which indicates beginning of the trend to the upside.
The breakout is confirmed as it is followed by higher volumes and a Gap, which can be considered as a breakaway gap. The stock's price has surpassed the upper Bollinger band which illustrates the rising volatility for an up move.
The momentum indicator RSI has given a breakout too reflecting strong momentum for up move.
We recommend traders and investors to buy this stock for the target of Rs 4,860, with the stop-loss of Rs 4,065 strictly on the closing basis.
GAIL is nearing its 52-week high, which tells that the stock already is in strong momentum. The stock in the last trading session has given a breakout from the Ascending Triangle pattern, which may indicate that the stock's prior uptrend is set to continue.
The Bollinger bands, which are a measure of volatility on the daily time frame, have recently begun to widen, possibly signaling increased price movement and an upward trend.
The breakout is confirmed as it is followed by higher volumes and a Gap, which can be considered as a breakaway gap.
The relative strength index (RSI) on the daily time frame has sustained well above 50 mark on the daily as well as on weekly timeframe which again confirms the strong momentum in the prices.
We recommend traders and investors to buy this stock for the target of Rs 110, with a stop-loss of Rs 98 strictly on the closing basis.
Torrent Power in the last trading session has shown a strong bounce to the upside from the crucial support of Rs 450. The stock has filled the Gap which was created 3 trading session ago. This can be considered as an exhaustion Gap, indicating an impending reversal to the upside.
The prices have surpassed the downward slopping trend line which indicates a reversal too.
The prices have formed Morning Star Candlestick pattern, which the confirmation would be above the high of current day.
We can witness a positive divergence between the prices and RSI which signals a reversal. We recommend traders and investors to hold this with a stoploss of Rs 445.
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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