After a sharp downturn on February 8, the market is likely to consolidate with key support at 21,500, while on the higher side, 21,900-22,000 could be the key hurdle in the coming session, experts said.
On February 8, the market witnessed selling pressure as well as profit-booking after the Monetary Policy Committee maintained status quo on policy rates. The Nifty 50 was down 213 points at 21,718 and formed a long bearish candlestick pattern on the daily charts but took support at 21-EMA (21,663).
The BSE Sensex was down 724 points to 71,428, while the selling pressure in broader markets was less compared to benchmarks. The Nifty Midcap 100 and Smallcap 100 fell 0.05 percent and 0.4 percent.
Stocks that bucked the trend and recorded healthy gains included Hindustan Aeronautics, State Bank of India, and Max Financial Services. Hindustan Aeronautics has seen a decisive breakout of horizontal resistance trendline and clocked 5 percent gains to end at record closing high of Rs 3,097. The stock has formed long bullish candlestick pattern on the daily charts with robust volumes, while trading above all key moving averages.
State Bank of India also ended at new closing high of Rs 699.55, up 3.6 percent and formed bullish candlestick pattern with long upper shadow on the daily charts, with significantly higher volumes for yet another session. In previous session, there was a horizontal resistance trendline breakout, while the stock traded well above all key moving averages.
Max Financial Services extended rally for third consecutive session, rising 3.7 percent to Rs 996 and formed long bullish candlestick pattern on the daily timeframe with above average volumes. The stock started trading above all key moving averages since previous session, while it is 60 rupees away from the December high.
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, it has formed a higher bottom formation along with incremental volume activity, hence the structure of the stock indicates the beginning of a new up move from the current levels.
For positional traders, Rs 3,000 would be the trend decider level. Trading above the same uptrend formation will continue till Rs 3,350. However, if it closes below Rs 3,000, traders may prefer to exit from trading long positions.
On the weekly scale, the counter is into a rising channel chart formation with higher high and higher low series pattern. The technical indicators like ADX (average directional index) is also indicating further up trend from current levels, which could boost the bullish momentum in coming horizon.
For the traders, Rs 675 would be the key support level to watch out. Above which the uptrend structure should continue until Rs 750.
The counter was into a sloping channel from the past few weeks. Eventually, its downward move stopped near the important demand zone. Moreover, the strong rebound in the counter from its demand zone on daily and weekly scale suggests that the bullish momentum to remain in the near future.
Unless it is trading below Rs 960, positional traders retain an optimistic stance and look for a target of Rs 1,070.
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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