The market was under pressure for yet another session, pulling down the Nifty50 to a one-week low on February 20. Most sectors, barring auto and IT, weighed down on the benchmark indices.
The BSE Sensex fell more than 300 points to 60,692, while the Nifty50 corrected 100 points to 17,845, the lowest closing level since February 13, forming a bearish candle on the daily charts making lower highs lower lows for the second consecutive session.
The Sensex lost nearly 1,000 points and the Nifty50 shed nearly 300 points in three trading days from the recent high.
The broader markets were mixed in trade with negative breadth. The Nifty Midcap 100 index was up 0.08 percent and the Nifty Smallcap 100 index fell 0.3 percent. More than three shares declined for every two rising shares on the NSE.
Stocks that outperformed the broader markets included Sonata Software which surged over 8 percent to end at a record closing high of Rs 736 and formed a robust bullish candle on the daily charts with significantly higher volumes. The stock traded well above all key short and long-term moving averages, which is positive indication.
JBM Auto was also in action, climbing 5 percent to Rs 581, the highest closing level since April 22, 2022 and formed long bullish candle on the daily charts, with making higher high higher low formation. This stock also traded above all key moving averages, which is a positive sign.
Kalyan Jewellers India shares rallied nearly 7 percent to Rs 119 and formed strong bullish candle on the daily charts with above average volumes. The stock has broken its downward sloping resistance trendline adjoining highs of December 29, 2022 and February 7, 2023. With Monday's rally, it got back above short as well as long term moving averages.
Here's what Vidnyan Sawant of GEPL Capital recommends investors should do with these stocks when the market resumes trading today:
Sonata Software is currently trading at record Highs, which tells that the stock already is in strong momentum. The stock broke out of Inverse Head & Shoulder Pattern, signaling a reversal of the trend to the upside.
The prices are consistently trading near upper Bollinger Band, which shows the rising volatility for an up move. The up move in the prices are accompanied by higher volumes illustrates long built up in the stock.
The Relative Strength Index (RSI) on the daily timeframe is at its highest level Since March 2020, reflecting a strong upward momentum in the underlying trend.
We recommend traders and investors to buy and accumulate this stock for the target of Rs 855 with a stop loss of Rs 670 on the closing basis.
JBM Auto polarity shifted positively around Rs 480, indicating a favourable sentiment toward the stock's prices. The stock has broken out of an Inverse Head & Shoulder pattern in the latest trading session, indicating a potential uptrend.
The stock is trading above key moving averages, including the 50-day and 200-day exponential moving averages, confirming the presence of an uptrend.
The Relative Strength Index (RSI) on the daily timeframe has shown a breakout, indicating growing momentum in the stock's prices.
We recommend traders and investors to buy and accumulate this stock for the target of Rs 650 with a stop-loss of Rs 545 on the closing basis.
Kalyan Jewellers has exhibited a bullish trend since June 2022, and despite a recent correction, it has not dropped below the 38.20 percent Fibonacci retracement level of the previous upward movement from Rs 55 (June 2022) to Rs 134 (January 2023). This indicates that the prices have a favourable sentiment, and suggests a potential for further upward movement.
The stock has formed a good base formation, with a change in polarity around the Rs 105 level that has been tested multiple times. The stock has confirmed an up move by protecting its 50-day moving average.
The Relative Strength Index (RSI) on both daily and weekly timeframes indicates upward momentum, with values above the 50-mark
Traders and investors are advised to hold this stock, with a suggested stop-loss of Rs 100 on the closing basis.
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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