The market retreated from a fresh record high on the Nifty50 due to profit-taking after a 4.5 percent run-up in the September series. In fact, the index turned volatile after a record high and a sharp weakness in broader markets also impacted the sentiment. Hence, if the index breaks the 19,900-19,800 area in coming sessions, then 19,600-19,500 can be possible on the downside, while 20,100 is expected to play a critical role in further uptrend towards the 20,500 levels, experts said.
The Nifty50 declined 3 points to 19,993, and the BSE Sensex gained 94 points at 67,221, while the Nifty Midcap 100 and Smallcap 100 indices were down 3 percent and 4 percent on weak breadth.
The Bank Nifty also corrected after volatility, falling 59 points to 45,511, while the Nifty IT supported the market, rising 335 points to 32,978, the highest closing level since April 13 last year and formed bullish candlestick pattern with long lower shadow on the daily charts.
Stocks that outperformed the broader markets included Infosys, JB Chemicals & Pharmaceuticals, and Grasim Industries. Infosys has formed long bullish candlestick pattern on the daily charts with above average volumes and sustained above downward sloping resistance trendline adjoining highs of December 1 last year and September 6 this year. The stock rose 1.7 percent to Rs 1,501.
JB Chemicals & Pharmaceuticals climbed 2.8 percent to end at record closing high of Rs 2,924, with strong volumes, and formed bullish candlestick pattern with long upper shadow on the daily timeframe, indicating profit booking at higher levels. The stock sustained above all key moving averages, which is a positive sign.
Grasim Industries moved closer to its record high of Rs 1,930 in January last year and formed High Wave kind of candlestick pattern on the daily charts. The stock rose half a percent to Rs 1,870.95, the higher closing level since January 17 last year, with robust volumes. The stock closed at the breakout point of falling resistance trendline adjoining highs of January 18 last year and September 5 this year.
Here's what Viraj Vyas of Ashika Stock Broking recommends investors should do with these stocks when the market resumes trading today:
After an impressive and largely one-sided rally from the COVID lows of Rs 400, this stock started its period of time and price correction in January 2022. Over the past 20 months, it has been predominantly trading in a rangebound by Rs 1,880 on the upside and Rs 1,500 on the downside.
In a noteworthy development, the stock experienced a substantial surge in trading activity yesterday as it made an attempt to break out of this consolidation range. Currently, the stock is trading above both its 21-day and 50-day EMAs (exponential moving average), indicating positive momentum, and it appears poised to initiate an impulsive move.
A decisive breakout above Rs 1,900 levels is likely to trigger this anticipated move. It's important to keep in mind that a key support level for this stock can be found at Rs 1,840.
The stock has been underperforming recently, primarily due to the weaker guidance provided by the management during the Q1FY24 results season. As one of the largest components of Nifty IT, it has notably lagged behind the index in recent sessions.
Currently, the stock is making an attempt to break above a downward-sloping trendline, which is formed by connecting the highs of December 2021 and December 2022. A successful breakout above this trendline could potentially initiate a short-term upswing in the stock, with a target around Rs 1,600 levels.
It's crucial to note that Rs 1,600-level is expected to act as critical support.
JB Chemicals & Pharmaceuticals
Since 2020, the stock has maintained a robust uptrend, consistently establishing higher highs and higher lows. Although a brief consolidation occurred between November 2022 and May 2023, the stock subsequently resumed its impulsive movement in line with the primary trend.
Notably, the stock's ability to achieve new highs stands out, particularly in a period when Nifty and other major indices are displaying signs of weakness. This dual dynamic illustrates both the stock's inherent strength and its relative outperformance compared to the benchmark.
A fresh all-time high accompanied by a new weekly high further underscores the stock's resilience and suggests that its strength is poised to persist in the upcoming weeks.
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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