The market closed the monthly F&O expiry day on a negative note due to selling pressure in banks, FMCG, oil & gas stocks. In the start of September series, the Nifty50 is likely to take a support at 19,250-19,200 and face hurdle at 19,400-19,500 levels on the higher side. The decisive breakout on either side can give direction to the market, experts said.
The Nifty50 dropped 94 points to 19,254 and formed bearish candlestick pattern on the daily charts, while the BSE Sensex declined 256 points to 64,831.
The Bank Nifty extended southward journey for second consecutive session, falling 243 points to 43,989, while the Nifty IT remained rangebound, rising 61 points to 31,165.
The broader markets continued uptrend for fifth consecutive session as the Nifty Midcap 100 and Smallcap 100 indices ended higher by 0.1 percent and 0.8 percent respectively.
Stocks that bucked the trend included Rossari Biotech, NCC, and Data Patterns India. Rossari Biotech has given a strong consolidation breakout on Thursday, rising 5 percent to Rs 865 and formed long bullish candlestick pattern on the daily charts. The stock also firmly got back above 50-day EMA (Rs 828) as well as 21-day EMA (exponential moving average Rs 830), with above average volumes.
NCC has seen a breakout of nearly a month-long consolidation and formed strong bullish candlestick pattern on the daily scale with robust volumes. In fact, the trading volume was highest since January 2 this year. The stock jumped 10 percent to multi-year high of Rs 169.6 and traded above all key moving averages.
Data Patterns India has formed Bullish Engulfing kind of pattern on the daily timeframe with healthy volumes, indicating a possibility of further upside in the counter. The stock rose over 5 percent to Rs 2,372, while on the monthly scale, it has seen run-up for sixth consecutive month.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
After the sharp upward rally, the stock went into the consolidation mode on the daily scale. The recent breakout in the stock is representing a bullish continuation pattern, which is signifying a new leg of up move from the current levels.
For positional traders, Rs 163 would be the trend decider level. Trading above the same uptrend formation will continue till Rs 187. However, if it closes below Rs 163, traders may prefer to exit from trading long positions.
The counter is into a rising channel from last few sessions. Additionally, on the weekly charts the stock has formed a Cup and Handle chart formation. Therefore, breakout move from the resistance zone for the bullish continuation rally is very likely to occur in the coming trading sessions.
For the traders, Rs 835 would be the key support level to watch out. Above which the uptrend structure should continue until Rs 930.
On the weekly scale, the counter is into a rising channel chart formation with higher high and higher low series pattern. The technical indicators like RSI (relative strength index) and MACD (moving average convergence divergence) also indicating further up trend from current levels which could boost the bullish momentum in coming horizon.
As long as the stock is trading above Rs 2,300 the uptrend formation is likely to continue. Above which, the counter could move up to Rs 2,550. On the flip side, fresh sell-off possible only after dismissal of Rs 2,300. Below the same, the stock could retest the level of Rs 2,250.
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