The market maintained its northward journey for the fifth consecutive session, but the formation of Doji and Spinning Top kind of candlestick pattern in the last couple of trading sessions implying the momentum may be fading a bit, indicate the possibility of a consolidation in the coming days. Even the Bank Nifty showed a similar kind of trend after rising for five days in a row, experts have said.
Hence, 22,000 is expected to be an immediate support for the Nifty 50, followed by 21,850 area, while the hurdle on the higher side is likely to be 22,200, followed by 22,300 area, according to experts.
On February 19, the Nifty 50 rallied 82 points to 22,122, and the BSE Sensex was up 282 points at 72,708, while the Nifty Midcap 100 and Smallcap 100 indices gained 0.4 percent each.
Stocks that outperformed broader markets as well as benchmark indices included Container Corporation of India, JBM Auto, and Sonata Software. Container Corporation of India jumped 3 percent to end at a record closing high of Rs 1,010 and formed a bullish candlestick pattern with long lower shadow on the daily charts with average volumes, continuing its uptrend for five days in a row. The stock traded above all key moving averages, which is a positive sign.
JBM Auto, too, ended at record closing high of Rs 2,382, up nearly 18 percent and formed robust bullish candlestick pattern on the daily charts with significantly higher volumes, after several weeks of consolidation. The stock traded above all key moving averages.
Sonata Software, also, recorded a healthy performance, rising 5.6 percent to end at a new closing high of Rs 842 and formed a long bullish candlestick pattern on the daily timeframe with above average volumes. Further, the stock traded above all key moving averages, supporting the positive sentiment for the counter.
Here's what Ashish Kyal of Waves Strategy Advisors recommends investors should do with these stocks when the market resumes trading today:
Container Corporation of India
The firm has continued to outperform and is moving up day-by-day in the higher high higher low formation, which can be seen on the below daily chart. Prices just gave a breakout of the upward tilted channel, which is a positive sign.
The stock is following a classic Elliott wave theory. The current rise is in form wave (v). On the daily chart recently, the price took support of Ichimoku cloud and bounced back on the upside and broke its previous swing high level of Rs 973.
In short, trend for CONCOR looks bullish. Use buy on dips strategy for better risk reward with a target of Rs 1,040 as long as Rs 960 holds on the downside.
JBM Auto showed a huge rise in the previous trading session, resulting in the formation of a large green candle. Prices are moving well within an upward sloping channel, as shown in the below chart.
In addition, the 20 period exponential moving average has provided classic support in this rise. As per this, support is at Rs 2,150 followed by Rs 1,990 levels. However, after a sharp rally chances of profit booking cannot be ruled out. One can use this as a buying opportunity as the overall trend is positive.
In short, outlook for JBM Auto remains positive. Use dips as a buying opportunity with a target of Rs 2,480. While on the downside, Rs 2,150 is the important support level.
Sonata Software has been rising lately and is still trading in a significant uptrend. From a technical perspective, the stock has closed above the upper levels of the Bollinger bands. Also, prices gave a close above the previous swing high which was near Rs 838 levels.
Therefore, a follow up buying might lead to an even greater increase in this stock.
In short, the trend for this stock is positive. A breach above Rs 850 can lift the price higher towards Rs 885 as long as Rs 815 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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