For the first time in last five sessions, the market managed a higher close. We opened lower, remained volatile but gained strength in last couple of hours. The rally, despite weakness in global counterparts and elevated oil prices, was driven by private banks, technology, pharma stocks, and index heavyweight Reliance Industries.
The Nifty50 jumped more than 120 points to 16,478, forming a bullish candle on the daily charts.
The broader space also positive with Nifty Midcap 100 and Smallcap 100 indices have gained half a percent and two-tenth of a percent, but the market breadth was only slightly in favour of advances, a cause of concern.
The volatility cooled down further to 19.14 levels, down by 3.51 per cent, which was a comfort for bulls.
Stocks that were in action included Container Corporation which rallied 5.5 per cent, Biocon which jumped 5.2 per cent, and Indian Energy Exchange which climbed 5 per cent. All these stocks were top gainers in the futures & options segment.
This Friday morning, Shrikant Chouhan of Kotak Securities recommends how should you position yourself in these stocks:
Container Corporation of India
After short term correction, the stock took the support near Rs 620 and bounce back sharply. On last Thursday, it rallied over 5 perc ent and after a long time, it succeeded to trade above 200 days SMA (simple moving average - Rs 649.50) which is broadly positive.
In addition, on daily charts, it has formed long bullish candle that also supported further uptrend from current levels.
For the positional traders, Rs 640 or 50 days SMA would be the trend decider. If it trades above the same, we can expect further uptrend up to Rs 680-700. If it closes below Rs 640, traders may prefer to exit from trading long positions.
After a medium-term correction, the stock took support near Rs 310 and reversed sharply. After a promising reversal formation, it successfully cleared the short-term resistance of Rs 325.
In addition, after a long time, it succeeded to close above 20 days SMA (Rs 327.9) which is broadly positive for the Biocon.
Further, on daily charts, it has formed promising bullish candle that also supported the short-term uptrend.
Unless it is trading below Rs 325, positional traders retain an optimistic view, and look for a target Rs 345-350. Fresh buying can be considered now and on dips if any, between Rs 335 and Rs 330 levels, with a stop-loss below Rs 325.
On the daily and weekly charts, the stock is consistently facing selling pressure at higher levels. Post quick short-term correction, the stock bounced back sharply and on last Thursday, it rallied nearly 5 per cent.
On daily charts, the stock has formed long bullish candle, which is broadly positive. But at the same time, the stock is consistently taking resistance near 20 days SMA. The medium-term texture of the stock is non-directional, as perhaps traders are waiting for a breakout on either side.
For the bulls, Rs 190 or 20 days SMA would be the important breakout level to watch. And if the stock manages to close above the same, we can expect quick uptrend rally towards Rs 200-205.
On the flip side, trading below Rs 178 may increase further weakness up to Rs 170-165.
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