Bears retained their charge over Dalal Street for yet another session, dragging the Nifty50 below its support levels of 18,200 on May 17, while the overall market breadth was also in favour of bears as 1,164 shares declined against 874 rising shares on the NSE.
The BSE Sensex fell over 370 points to 61,561, while the Nifty50 plummeted more than 100 points to 18,182 and formed bearish candlestick pattern on the daily scale with making higher tops higher bottoms formation.
Bank Nifty was also under pressure, falling more than 200 points to 43,699 and saw bearish candle formation on the daily timeframe, while on the broader markets front, the Nifty Midcap 100 index declined 0.1 percent and Smallcap 100 index gained half a percent.
Stocks that outperformed broader markets included CreditAccess Grameen which rallied nearly 8 percent to end at record closing high of Rs 1,171.5 and formed bullish candlestick pattern with long upper shadow on the daily scale, with significantly higher volumes.
Cyient has formed long bullish candle on the daily scale with above average volumes, with making higher tops higher bottoms formation for third consecutive session. The stock jumped 4.6 percent to end at record closing high of Rs 1,287. Overall, it has been in an uptrend since November last year with intermittent correction and consolidation.
Amara Raja Batteries shares gained 3.6 percent to close at fresh five-month high of Rs 649 and formed long bullish candlestick pattern on the daily timeframe. The stock has seen a breakout of downward sloping resistance trendline adjoining highs of December 9 last year and May 12 this year.
Here's what Jigar S Patel of Anand Rathi Shares & Stock Brokers recommends investors should do with these stocks when the market resumes trading today:
Since the last 4-5 months it has given a handsome return of 45 percent. At the current juncture, it is approaching its potential reversal zone of Rs 1,200 (Bearish Butterfly pattern).
Additionally, there is a negative divergence on the weekly scale where the price is making higher highs but RSI (relative strength index) weekly is not making higher highs which is a matter of concern.
So keeping this in mind one should book profits in the range of Rs 1,190-1,220 and avoid fresh longs.
At the current juncture, the said counter has approached its historical resistance Rs 1,290-1,300 levels along with weekly RSI is looking extremely overbought.
Additionally, 200 DEMA (day exponential moving average) stands around Rs 941 levels which is far below the current market price, so mean reversion could be possible.
Last but not least, on a daily scale negative divergence has emerged (refer to the chart) where price action is making higher highs and RSI is making lower highs.
One should immediately book profits in the zone of Rs 1,290-1,300 levels.
Recently the said counter has given breakout from its previous trading range of Rs 610-640 and currently well placed above it. On indicator front, the price action is well above William Alligator (trend following indicator) along with daily RSI constantly trading above 50 levels which is sign of strength in the counter.
Thus, one can buy in the range of Rs 640-650 with upside target of Rs 700 and stop-loss would be Rs 625 on daily close basis.
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