The market has smartly defended 19,500 on the Nifty50 in a correction triggered by the Israel-Hamas conflict on October 9. Hence, as long as the index holds this level, it may make attempts to hit the 19,800 mark, but breaking that point can bring the index near its previous week's low of 19,300 mark, experts said.
The Nifty50 fell over 140 points to 19,512, and the BSE Sensex corrected nearly 500 points to 65,512, while the market breadth was largely in favour of bears with a ratio of 1:4. As a result, the Nifty Midcap 100 and Smallcap 100 indices declined 1.3 percent and 1.8 percent.
Among sectors, the Bank Nifty tanked 474 points or 1.07 percent to 43,887, but the Nifty IT outperformed, falling just 33 points to 32,309 and holding 20-day EMA (exponential moving average placed at 32,225).
Stocks that bucked the trend included AAVAS Financiers, Oil India, Mahindra Holidays & Resorts India. AAVAS Financiers has formed long bullish candlestick pattern with a long upper shadow on the daily charts and closed 2.3 percent higher at Rs 1,765, with above average volumes. The stock held above all key moving averages (20, 50, 100 and 200-day EMAs), which is a positive sign.
Oil India hit the highest level since November 2014 during the day and finally settled with a 5.2 percent rally at Rs 311, forming a strong, bullish candlestick pattern with long upper shadow on the daily scale, with robust volumes, especially after consolidating for over a week.
After consolidation through the last few weeks, Mahindra Holidays registered strong bullish candlestick pattern in previous session, followed by Monday's positive candle with long lower shadow on the daily charts, with healthy volumes on both the days. The stock ended at a record closing high of Rs 438.70 on the NSE, up 1.1 percent, after 7.6 percent gains in the previous session.
Here's what Ashish Kyal of Waves Strategy Advisors recommends investors should do with these stocks when the market resumes trading today:
In the previous session, Oil India rallied after International Crude prices surged due to Israel-Hamas crisis. Oil India made a new 52-week high.
On the below chart, we can see that after a consolidation of almost 2 months, prices finally gave a break of the range and also managed to stay above it which is deemed to be a bullish sign.
The stock is moving well within an upward sloping channel since a year now. 55 period exponential moving average has acted as a brilliant support to the prices. This suggests that as long as price holds above this line short term trend is positive. As per this nearest support is near Rs 280 levels.
In short, Oil India looks positive. Use dips to ride the trend with a target of Rs 330, while on the downside, Rs 280 can act as a near term support.
AAVAS Financiers closed higher despite of major indices falling. On the daily chart, after retesting channel prices managed to sustain above it.
Currently the stock is trading near its previous swing high which is near Rs 1,820 levels. Any decisive break of the same is needed to continue further bullish momentum. Along with this, prices continued to move upside by taking support of the base line(red).
One can continue to trade in the direction of ongoing trend as long as price holds and stays above the cloud. As per this, nearest support is near Rs 1,670 levels. Price needs to give a decisive break above Rs 1,820 for further buying to emerge with the targets of Rs 1,970-2,000.
Mahindra Holidays & Resorts India
On the below chart, we can see prices recently gave breakout of the consolidation which is a positive signal. On the daily chart, the price is currently trading in an upward sloping channel. Prices are also moving up in a higher high higher low formation.
Also, we can see prices have given a breakout above the upper bands and has closed above it. If the stock manages to sustain this break then further buying can continue to be seen in this stock as there is still room left on the upside.
In short, Mahindra Holidays looks bullish for a move towards Rs 460 or higher as long as Rs 420 holds on the downside.
Follow Ashish Kyal on Twitter - @kyalashish
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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