It appeared to be a lacklustre session for the market on February 2 with benchmark indices trading within the previous day's range, though there was bullish candlestick pattern formation with upper and lower shadows. The correction in Adani group, oil & gas, metal & select financial services stocks put pressure on the market, but there was support from FMCG, IT and select banking stocks, and also from positive global cues.
The BSE Sensex gained more than 200 points to 59,932, while the Nifty50 has defended 17,500 mark for fifth consecutive session on Thursday and settled the session with 6 points loss at 17,610.
The Nifty Midcap 100 and Smallcap 100 indices gained 0.15 percent and 0.6 percent respectively despite weak market breadth.
Stocks that outperformed broader markets included Britannia Industries which rallied nearly 5 percent to end at record closing high of Rs 4,573 and formed bullish candle on the daily charts with long lower shadow indicating support-based buying in the stock, with strong volumes. It has given a strong breakout of downward sloping resistance trend line adjoining highs of December 19, 2022 and January 25, 2023, indicating positive mood among participants.
Welspun India shares rallied nearly 9 percent to Rs 70 and formed robust bullish candle which resembles Bullish Engulfing kind of pattern formation on the daily charts with large volumes after taking a support in previous session at horizontal support trendline adjoining lows of May 26, 2022 and February 1, 2023.
LTIMindtree was also in focus, rising 4.5 percent to Rs 4,588 and formed long bullish candle on the daily charts with above average volumes. There was a strong breakout of long downward sloping resistance trend line adjoining highs of November 15, 2022 and January 24, 2023, indicating positive mood in the stock.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
Post remarkable up move of the last few months, the stock was in a rangebound mode. The consolidation structure of the chart formation indicated at the bullish continuation pattern. Therefore the fresh strong breakout move of the stock suggests at uptrend to persist in the near term.
For the traders, Rs 4,450 would be the key support level to watch out. Above which the uptrend structure will continue until Rs 4,900.
After sharp decline from the higher levels, the counter was in the accumulation zone where it was trading in a rectangle formation. However, on the daily charts there is a gradual up move in the counter along with incremental volume activity, which suggests a new leg of bullish trend in the near term.
Unless it is trading below Rs 4,450, positional traders retain an optimistic stance and look for a target of Rs 4,920.
On a broader time frame, the stock had been in a prolonged downtrend. Therefore it is currently into an oversold territory and available near to its demand area. The texture of the chart formation and technical indicator RSI (relative strength index) is indicating the current reversal formation could lead to a new leg of the uptrend from its demand zone.
In the near term, Rs 67 would be the immediate support zone for the Welspun. Above the same, the pullback rally will continue up to Rs 76-78.
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