The market is expected to trade within a range through the next few sessions as the Nifty 50 faces an immediate resistance at 21,700 and looks out for support at 21,500. If decisively broken on either side of this range (21,500-21,700), there can be a near-term direction for the index, experts said.
On January 19, the Nifty 50 gained 160 points to close at 21,622 and formed Doji kind of candlestick pattern on the daily charts with higher high, higher low formation, indicating the possibility of an upward move in the following session.
The BSE Sensex rallied 496 points to 71,683, while the Nifty Midcap 100 and Smallcap 100 indices outpaced the benchmarks, rising 1.5 percent and 1.09 percent.
Stocks that were among strong performers on January 19 included Aarti Industries, Cummins India, and General Insurance Corporation of India. Aarti Industries has seen a nice breakout of downward sloping resistance trendline and recorded 11 percent rally to Rs 679. The stock has formed strong bullish candlestick pattern on the daily charts with significantly higher volumes, while trading above all key moving averages (20, 50, 100 and 200-day EMA - exponential moving average).
Cummins India rallied 4 percent to end at record closing high of Rs 2,112 on the NSE, and formed robust bullish candlestick pattern on the daily charts with above average volumes. The stock also traded above all key moving averages which is a positive sign.
General Insurance Corporation of India clocked 16.5 percent upward move in a single day to Rs 356, the highest closing level since August 6, 2018, after a decisive breakout of horizontal resistance trendline on the daily charts. The stock has formed robust bullish candlestick pattern with strong volumes and traded above all key moving averages.
Here's what Rajesh Palviya of Axis Securities recommends investors should do with these stocks when the market resumes trading today:
General Insurance Corporation of India
The stock is in a bullish trend in the short to medium term time frame forming a series of higher tops and bottoms indicating positive bias. With current week's strong gains of over 16 percent the stock has confirmed "multiple resistance" breakout at Rs 338 levels on a closing basis.
This breakout is accompanied with huge volumes indicating increased participation in the rally. On the weekly chart, the stock has also confirmed "Flag" formation (a continuation pattern) which indicates continuation of prior up trend.
The daily "Bollinger band" buy signal suggests increased momentum. The daily weekly and monthly strength indicator RSI is in positive terrain which supports sustained strength across all the time frames.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 380-415, with downside support zone of Rs 305-295 levels.
With Friday's high of Rs 2,118, the stock has registered a new all-time high and also closed around the same indicating bullish sentiments. The stock has recaptured its 20-day SMA (simple moving average) and rebounded very sharply which supports the bullish trend.
On the weekly time frame, the stock has confirmed "rounding bottom" breakout at Rs 2,020 levels which reconfirms bullish bias.
The stock is well placed above its 50, 100 and 200 day SMA (simple moving average) and these averages are also inching up along with rising prices. The daily weekly and monthly strength indicator RSI is in positive terrain which supports sustained strength across all the time frames.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 2,230-2,400, with support at 2,050-2,020 levels.
On the daily and weekly time frame, the stock has experienced trend reversal around Rs 575 levels. Currently the stock is in a bullish trend forming a series of higher tops and bottoms formation.
The stock is also well placed above its 20, 50, 100 and 200 day SMA which reconfirms bullish trend. In the past couple of sessions, the stock has reacted towards the 20 and 50 day SMA and rebounded very sharply which signals positive bias. Huge rising volumes show increased momentum and participation.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 750-785, with downside support zone of Rs 613-580 levels.
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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