The market is expected to consolidate in upcoming sessions, facing resistance at 22,800 and surpassing this level can take the Nifty 50 towards the 23,000 mark, experts said.
On the downside, the index may take immediate support at 22,500 and crucial support at 22,300, and breaking these levels can drag it down to the 22,000 mark, they said. Further, consistent increasing volatility also seems to be limiting the upside as it may put the bulls at uncomfortable position.
On May 2, the Nifty 50 rose 43 points to 22,648, and formed a bullish candlestick pattern on the daily charts, while the BSE Sensex climbed 128 points to 74,611. The broader markets also ended higher with the Nifty Midcap 100 index rising 0.5 percent and Smallcap 100 index 0.04 percent.
But there were several stocks in the Nifty 500 index that fared much better than the broader markets including Welspun Corp, Trent, and Ashok Leyland. Welspun Corp jumped 7.2 percent to end at a record closing high of Rs 605 and formed a robust bullish candlestick pattern on the daily charts with significantly higher volumes. The stock has seen a breakout of falling resistance trendline adjoining highs of February 6 and April 25 this year, and traded above all key moving averages.
Trent also ended at new closing high of Rs 4,646.7, up 5.4 percent and formed a long bullish candlestick pattern on the daily timeframe with above-average volumes. The stock traded above all key moving averages, while the stock has seen a breakout of bullish Flag and Pole kind of pattern in the previous week and continued uptrend in the current week.
Ashok Leyland recorded healthy gains for yet another session, rising 4.5 percent to end at new closing high of Rs 201.35 and formed a strong bullish candlestick pattern on the daily charts with above-average volumes. Further, the stock traded above all key moving averages. In fact, the uptrend continued after the breakout of the falling resistance trendline earlier this week.
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 weekly scale. Additionally, the incremental volume activity of the stock indicates the beginning of a new upmove from the current levels.
For positional traders, Rs 580 would be the trend decider level. Trading above the same, uptrend formation will continue till RS 650. However, if it closes below Rs 580, traders may prefer to exit from trading long positions.
After the robust rally on the weekly scale, the stock went into consolidation mode. However, the recent breakout in the stock is representing a bullish continuation pattern signifying a new leg of upmove in the coming horizon.
As long as the stock is trading above Rs 4,480, the uptrend formation is likely to continue. Above which the counter could move up to Rs 4,960. On the flip side, a fresh sell-off is possible only after dismissal of Rs 4,480.
On the daily 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) are also indicating further uptrend from the current levels, which could boost the bullish momentum in the coming horizon.
For the traders, Rs 192 would be the key support level to watch out for, above which the uptrend structure should continue until Rs 215.
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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