The market tried to extend previous day's gains and hit a high of 18,200 on the Nifty50, but the profit booking at higher levels made the attempt fail and the index closed flat by taking support at around 18,100 or 50 DEMA (days exponential moving average) on January 24 amid caution ahead of expiry of January derivative contracts on Wednesday.
The expiry of monthly contracts will take place on Wednesday, a day before the actual session. Monthly contracts usually get expired on the last Thursday of every month but this time we have a holiday on the same day due to Republic day.
The BSE Sensex gained 37 points at 60,979, while the Nifty50 shed 0.20 point to 18,118.30 and formed bearish candle on the daily charts as the closing was lower than opening levels, with making higher high higher low formation for second straight session.
The broader markets closed lower and the breadth remained negative for yet another session. The Nifty Midcap 100 and Smallcap 100 indices fell 0.4 percent each.
Stocks that performed better than broader markets included Tata Motors which was the second biggest gainer in futures & options segment, climbing more than 3 percent to Rs 422, the highest closing level since December 6, 2022 and formed long bullish candle on the daily charts with strong volumes. The stock closed above all important long term averages (50, 100 and 200 DEMA) and got into momentum with expansion of Bollinger band. Also it has seen a breakout of downward sloping resistance trend line adjoining highs of August 17 and December 1, 2022, indicating positive mood among participants.
Poonawalla Fincorp shares rallied 4 percent to Rs 302.40 and formed small bodied bullish candle on the daily charts with long upper shadow indicating profit booking at higher levels. The volume was significantly higher. It remained above all important moving averages (short and long term) and continued to take a support at Rs 285 throughout this month.
L&T Technology Services was also in action, rising 3 percent to Rs 3,426 and formed bullish candle on the daily charts with upper shadow, with higher high higher low formation after forming Bullish Engulfing kind of pattern in previous session. The volume remained high for yet another session.
Here's what Vaishali Parekh of Prabhudas Lilladher recommends investors should do with these stocks when the market resumes trading today:
The stock after the decent correction witnessed recently has picked up well from the important support zone of Rs 375-380 levels and currently with a short consolidation phase near Rs 405-415 zone has moved past the significant 50 DEMA level of Rs 408 improving the bias.
The RSI (relative strength index) once again is improving with strength indicated and can carry on the momentum still further.
With a buy signal indicated, we anticipate for further rise and suggest to buy this stock for an upside target of Rs 475 levels keeping a stop-loss of Rs 395 level.
The stock recently had some consolidation phase maintaining above the significant 200-DMA level of Rs 285 and currently has moved past the important 50 DEMA level of Rs 297 to improve the bias. The daily chart has shown improvement in the trend with the price moving above the sloping trendline to strengthen the bias.
The RSI has indicated a rise from the consolidation period and further upward move is anticipated in the coming days. With the overall chart pattern looking attractive, we suggest to buy the stock for an upside target of Rs 340, keeping a stop-loss near Rs 287.
The stock after the steep slide has bottomed out near Rs 3,220 zone and indicated a pullback to show signs of trend reversal and is anticipated to rise further with bias improving.
The RSI has shown a decent trend reversal from the highly oversold zone to signal a buy and can carry on with the momentum in the coming days.
With the risk reward looking favourable and the chart looking attractive, we suggest to buy the stock for an upside target of Rs 3,850, keeping a stop-loss of Rs 3,220.
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