In the ongoing consolidation, the benchmark indices seem to be gradually gaining strength as the Nifty50 closed at the highest level of last two months. If the index manages to sustain 19,800, then it may first try to close above 19,850-19,000 area which can help the index move closer to record high levels, with strong support at 19,700-19,500 levels, experts said.
On November 22, the Nifty50 climbed 28 points to 19,811.8, the highest closing level since September 20, and formed small bullish candlestick pattern with long lower shadow on the daily charts, which resembles hanging man kind of candlestick pattern (the bearish reversal pattern) but the importance of this pattern seems less as it was formed within the rangebound trade.
The BSE Sensex was up 92.5 points at 66,023, while the Nifty Midcap 100 index gained 0.3 percent, but the Smallcap 100 index fell 1.2 percent due to weak market breadth.
Stocks that attracted lot of buying interest on Wednesday included Aegis Logistics, JSW Energy, and Gland Pharma. Aegis Logistics jumped 5 percent to Rs 328.75 and formed long bullish candlestick pattern on the daily charts after consolidation breakout, with strong volumes. The stock is now closer to 200-day EMA (Rs 335).
JSW Energy has also seen a consolidation breakout and formed long bullish candlestick pattern on the daily scale with strong volumes. The stock rallied 4.4 percent to Rs 418 and traded well above all key moving averages (20, 50, 100 and 200-day EMA), which is a positive sign.
Gland Pharma, too, saw horizontal as well as downward sloping resistance trendline and traded above all key moving averages. The stock rose 4 percent to Rs 1,719 and formed bullish candlestick pattern on the daily timeframe with above average volumes. The next key resistance area for the stock seems to be Rs 1,800, the high of September.
Here's what Jigar S Patel of Anand Rathi Shares & Stock Brokers recommends investors should do with these stocks when the market resumes trading today:
Since the last eight sessions, the said counter has been consolidating in the zone of Rs 310–320. In the previous trading session, it gave a clean breakout from the said range and closed near Rs 328 mark. The breakout seems genuine since it is accompanied by massive volume.
On indicator front, the daily RSI (relative strength index) has reversed from 50 levels, and the daily DMI’s (directional movement index) have turned bullish, thus making it a lucrative buy at the current juncture.
One can buy in the zone of Rs 320–330 with an upside target of Rs 360 and a stop-loss of Rs 307 on a daily closing basis.
JSW Energy has an almost similar chart structure to Aegis mentioned above. JSW Energy consolidated on 50 DEMA (day exponential moving average Rs 388) for some time.
In the previous trading session, it had a clean breakout and closed near Rs 418 mark. The breakout seems genuine since it is accompanied by massive volume.
On indicator Front, the daily RSI has reversed from 50 levels, and the daily DMI’s have turned bullish, thus making it a lucrative buy at the current juncture.
One can buy in the zone of Rs 415–420 with an upside target of Rs 445 and a stop-loss of Rs 403 on a daily closing basis.
On a daily scale, the said counter has sustained support levels of Rs 1,640–1,650 since the last 8–10 sessions. In the previous trading session, it broke the resistance zone of Rs 1,700.
On indicator front, the daily RSI has reversed from 50 levels, and the daily DMI’s have turned bullish. One can buy in the zone of Rs 1,710–1,725 with an upside target of Rs 1,800 and a stop-loss of Rs 1,675 on a daily closing basis.
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