Experts advised traders to maintain caution, especially after the formation of a bearish Shooting Star and a Double Top candlestick patterns on the daily charts in the previous session, followed by a bearish candlestick formation on February 5. Hence, further sharp uptrend is possible only after the Nifty 50 decisively surpasses its record high of 22,126, till then the consolidation may be seen with support at 21,500 mark, experts said, adding that the Bank Nifty seems to have turned cautious ahead of the Monetary Policy Committee meeting on February 8.
On February 5, the Nifty 50 shed nearly 200 points from the day's to close 82 points down at 21,772, and the BSE Sensex fell 354 points to 71,731, while the broader markets had a mixed trend.
Stocks which reported strong performance in the Nifty 500 league included Cipla, Bharat Forge, and Redington India. Cipla ended at new closing high of Rs 1,434, continuing northward journey for four days in a row, and formed long bullish candlestick pattern on the daily charts with above average volumes. The stock continued to trade above all key moving averages (20, 50, 100 and 200-day EMA - exponential moving averages) which is a positive sign.
Bharat Forge also traded above all key moving averages, rising 2.6 percent to Rs 1,272 and formed bullish candlestick pattern on the daily timeframe. The stock has seen a breakout of downward sloping resistance trendline with above average volumes, which is a positive sign.
Redington India has also seen a decisive breakout of falling resistance trendline adjoining highs of December 12, 2022 and July 6, 2023, and recorded a robust bullish candlestick pattern on the daily charts. It has seen a positive opening and clocked 8 percent gains to end a new closing high of Rs 204, with strong volumes for yet another session.
Here's what Ashish Kyal of Waves Strategy Advisors recommends investors should do with these stocks when the market resumes trading today:
Cipla managed to break its previous swing high, achieving record high closing. Since past 4 trading sessions, the stock has not given any closing below its prior day’s low which keeps the tone positive.
Middle Bollinger band is acting as strong support for this stock i.e. Rs 1,340. Adding to the positive outlook, the MACD (moving average convergence divergence) indicator recently presented a bullish crossover, signaling bullish momentum can continue in the next few trading sessions.
In short, outlook for Cipla is bullish. Dips can be used as buying opportunity for a move to Rs 1,550 levels.
Bharat Forge broke its trading range of past 5 trading sessions i.e. Rs 1,200 – Rs 1,250 levels. Super Trend has given a positive signal on the daily chart which indicates bullish bias. MACD is about to give a bullish crossover for which follow up buying is needed. Nearest support is placed at Rs 1,220.
In short, Bharat Forge is bullish. A sustained move above Rs 1,275 can lift prices towards new record high levels of Rs 1,350 as long as Rs 1,220 holds on the downside.
Redington has been moving higher and intact in strong uptrend. Prices have given a close above Rs 195 levels which confirms breakout of the Rounding Bottom. Price bounced back on the upside by taking support of the Ichimoku cloud.
In short, trend for this stock is positive. Use dips towards Rs 198 as a buying opportunity for a move towards Rs 222-225 levels as long as Rs 190 holds on the downside.
Follow Ashish Kyal on Twitter - @kyalashish
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