The market closed higher, though with moderate gains, for the first time in the last six consecutive sessions on March 16, tracking the rally in European peers. The BSE Sensex gained nearly 80 points to 57,635, while the Nifty50 remained below the psychological 17,000 mark but closed with 13 points gains to 16,986.
The index showed a smart recovery from the day's low and finally closed near opening levels, resulting in the formation of Long Legged Doji kind of pattern on the daily charts, indicating indecisiveness or tug of war between bulls and bears.
Experts feel the Nifty needs to get back above the 17,000 mark to march towards the 17,200-17,300 area, followed by 17,400-17,500 levels, with crucial support at the 16,800 area.
Stocks that performed better than broader markets included ICICI Prudential Life Insurance Company, which jumped nearly 7 percent to Rs 410 and formed a big bullish candle on the daily scale with healthy volumes. The stock has decisively broken its downward-sloping resistance trendline adjoining highs of January 19 and February 16.
Hindustan Petroleum Corporation was one of the star performers, rising over 6 percent to Rs 244.5, the highest closing level since January 25 this year and formed a robust bullish candle on the daily timeframe, with strong volumes. The stock traded well above all key moving averages (9, 21, 50, 100 and 200-day EMA (exponential moving average).
DLF was also in action, climbing more than 4 percent to Rs 360 and there was the formation of a long bullish candle on the daily charts with a long lower shadow. The volumes remained strong and the stock has been making higher highs and higher lows for the second straight session.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
ICICI Prudential Life Insurance Company
On a broader time frame, the stock had been in a prolonged downtrend. Therefore, it is currently in oversold territory and reversed from its demand area.
The texture of the chart formation and technical indicator RSI (relative strength index) is indicating the current reversal formation could lead to a new leg of the uptrend from its demand zone.
In the near term, Rs 395 would be the immediate support zone for the stock. Above the same, the upward rally will continue up to Rs 440.
Hindustan Petroleum Corporation
On a daily scale, the stock is trading into a rising channel chart formation making the higher top and higher bottom constantly. As a result, all major technical trend indicators such as MACD (moving average convergence divergence) and ADX (average directional index) are strong and steady.
Therefore, an upward movement from the current level is very likely to continue in the coming horizon. For the traders, Rs 235 would be the key support level to watch out for. Above this the uptrend structure will continue until Rs 262.
On the weekly scale, the stock has seen consolidating in a range and currently, it has rebounded from the lower boundary of the range. The structure suggests a reversal of the trend and bullish strength for a fresh up move from the current levels.
For positional traders, Rs 348 would be the trend decider level. Trading above the same uptrend formation will continue till Rs 385. However, if it closes below Rs 348 traders may prefer to exit from trading long positions.
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