Bulls retained their dominance over Dalal Street for the second consecutive session on May 17. The benchmark indices clocked 2.5 percent gains following a rally in global counterparts. Every sector participated in the bulls' party with metals being the biggest gainer with 7 percent surge, while the rest of sectors gained between 1 percent and 3 percent.
The BSE Sensex jumped 1,345 points to 54,318, while the Nifty50 rose more than 400 points to 16,259 and formed large bullish candle on the daily charts.
The broader markets also joined the rally with the Nifty Midcap 100 and Smallcap 100 indices climbing around 3 percent each, while the volatility fell sharply by 7.27 percent to 22.74 levels, which needs to fall further to give more comfort to bulls.
Stocks that were in action included Vedanta which was the biggest gainer in the futures and options segment, and Nifty Metal index, rising nearly 12 percent to Rs 321; FSN E-Commerce Ventures (Nykaa) which jumped 3.3 percent to Rs 1,469; and Sunflag Iron and Steel Company was locked in 10 percent upper circuit at Rs 106.75.
Here's what Ruchit Jain of 5paisa.com recommends investors should do with these stocks when the market resumes trading today:
Recently, the metal stocks have seen a price wise correction and this stock, too, has corrected sharply in last one month from its high of Rs 405. The short-term trend seems negative as prices have breached the crucial 20 EMA (exponential moving average) support on the weekly chart which was acting as a support on declines since November 2020.
However, the momentum readings on the daily charts have reached the oversold zone and prices are around the 200 EMA support which indicates probability of a short-term bounce.
Thus, we could see a pullback move in the stock towards Rs 336-345 where short term traders can look to lighten up longs. The immediate support for the stock is placed in the range of Rs 300-290.
Sunflag Iron and Steel Company
The stock witnessed a sharp up-move in the month of April post a breakout from a long consolidation phase and it has retraced some of the gains on last couple of weeks.
The volumes during the up-move were quite high, while the same on corrections are low. This is a sign of an uptrend and hence, one should use declines as a buying opportunity.
The immediate support for the stock is placed around Rs 90 while the stock could see an up-move towards Rs 127 and Rs 135 in the near term.
Post listing, the stock saw some consolidation but has seen a corrective phase since the start of this month. The historical data is limited to analyze the stock for long term but from a near term perspective, Rs 1,200 is the immediate support.
On the flipside, resistances will be seen around Rs 1,570 and Rs 1,900 and only a move above these levels will then lead to a sustained up move.
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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