After a recent turmoil, the market made a strong comeback, but sustainability looked doubtful, given the caution maintained by the participants. Hence, the consolidation is likely to continue in the coming sessions with resistance at the 22,200-22,300 zone and support at 21,900-21,860, experts said, adding that if the index decisively sustains above 22,300 then the uptrend towards a record high may be possible, but in case it breaks 21,860, a sharp downturn can't be ruled out.
On March 14, the Nifty 50 fell 149 points to 22,147 and formed a bullish candlestick pattern on the daily charts, while the BSE Sensex climbed 335 points to 73,097. The broader markets also rebounded with the Nifty Midcap 100 and Smallcap 100 indices rising 2 percent and 3.5 percent respectively.
Stocks that performed better than broader markets included Hero MotoCorp, GAIL India, and Colgate Palmolive. Hero MotoCorp rallied 3.6 percent to Rs 4,675 and formed long bullish candlestick pattern which resembles Bullish Engulfing kind of pattern on the daily charts with average volumes. The stock traded above all key moving averages.
GAIL India rose 4.4 percent to Rs 176 and formed bullish candlestick pattern on the daily timeframe with above average volumes. The stock took support at around February's low and climbed back above 50-day EMA (exponential moving average).
Colgate Palmolive ended at record closing high of Rs 2,687.4, up 4.5 percent after breaking the recent consolidation range and formed long bullish candlestick pattern on the daily charts with healthy volumes. The stock traded above all key moving averages, which is a positive sign.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
The stock has given a breakout of its Ascending Triangle chart pattern on the daily scale. Additionally, the incremental volume activity of the stock indicates the beginning of a new up move from the current levels.
For positional traders, Rs 2,580 would be the trend decider level. Trading above the same, uptrend formation will continue till Rs 2,880. However, if it closes below Rs 2,580, traders may prefer to exit from trading long positions.
After a short-term price correction, the stock has formed a double bottom chart pattern and rebounded from the lower levels. The bullish activity near support zone indicates that the counter has limited downside.
Hence, making it a good candidate with regards to the risk and reward scenario. Unless it is trading below Rs 170 level positional traders can retain an optimistic stance and look for a target of Rs 190 in the coming horizon.
On the daily charts, the stock has formed a Cup and Handle chart formation. Therefore, post breakout move from the resistance zone, the bullish continuation rally is very likely to continue in the coming trading sessions.
For traders, Rs 4,510 would act as an important support zones while Rs 4,950 would be the key resistance area for the short-term traders. However, below the levels of Rs 4,510, the uptrend structure could be vulnerable.
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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