Bulls stayed in action for the third straight session and charged the Nifty50 decisively above 19,250-19,300. Hence, 19,500-19,600 is the possible resistance area to watch out for in the coming days, provided the index holds 19,300 as a support, experts said.
On November 6, the Nifty50 jumped 181 points to 19,412, and formed a bullish candlestick pattern on the daily charts, while the BSE Sensex climbed 595 points to 64,959. The broader markets also remained strong with positive breadth, as the Nifty Midcap 100 and Smallcap 100 indices gained 0.9 percent and 1.4 percent.
Stocks that clocked better performance than broader markets included Kalyan Jewellers India, Bharat Forge, and Amber Enterprises. Kalyan Jewellers India ended at record closing high of Rs 321.4, up 5.5 percent and formed bullish candlestick pattern on the daily scale with above average volumes. The stock has seen a breakout of downward sloping resistance trendline adjoining high of October 20 and November 3, with trading way above all key moving averages (20, 50, 100 and 200-day EMA - exponential moving average).
Bharat Forge has formed long bullish candlestick pattern with minor upper & lower shadows on the daily scale with robust volumes. The stock climbed above 21 as well as 50-day EMA on Monday and rose 4.4 percent to Rs 1,075.7 after consolidation of seven straight sessions.
Amber Enterprises recorded yet another 7 percent rally on Monday and formed strong bullish candlestick pattern for second consecutive day. After breakout of downward sloping resistance trendline in previous session, the stock maintained uptrend with above average volumes and traded above all key moving averages, which is a positive sign.
Here's what Ashish Kyal of Waves Strategy Advisors recommends investors should do with these stocks when the market resumes trading today:
Kalyan Jewellers made a fresh record high near Rs 324 levels. On the below chart, we can see that stock is following classic Elliott wave pattern. Wherein, wave iii of 3 is unfolding on the upside. Prices are currently trading near the channel resistance. Any close above it can result into multi-month channel breakout which can add more fuel to the rally.
Also, prices moved up by taking support of the mid bands. As long as support near Rs 305 is intact view remains bullish.
In short, trend of Kalyan Jewellers looks positive. Any close above Rs 322 can lift the price higher towards Rs 356 or higher as long as Rs 305 holds on the downside.
Bharat Forge have given very good returns in the past one year and has corrected after touching a lifetime high of Rs 1,148. It has corrected 5 percent from the top and now formed a bullish candle which is an opportunity for traders to enter at the current levels.
Previous session has shown good upward thrust. Prices have broken above super trend levels and is in positive territory. RSI is managing to move above 50 levels which shows momentum is improving.
Thus, short term trend for the stock is positive, with a target of Rs 1,130 and support near Rs 1,032 levels.
On the below chart, we can see that prices were moving in a range for a long time and gave a breakout in the previous two sessions. We have applied Bollinger bands and KST (know sure thing) indicator.
From technical perspective, the stock is bullish as price has breached the upper bands of the Bollinger Bands. This is supported by volumes. Since the Bollinger Bands is expanding prices are likely to move higher.
KST indicator is confirming the momentum is going up in the stock as the green line is just crossing above the signal red line. Use short term dips in the stock to buy as long as support at Rs 3,160 is intact.
In the nutshell, stock is bullish with buy on dips strategy for a move to Rs 3,800 levels.
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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