The market seems to be getting into an upward journey with 19,750 likely to be playing a crucial role for the up-move towards 19,800-20,000, experts said, adding that the Nifty50 is likely to continue to get some support at 19,600-19,500 levels, which also coincides with the 50-day EMA (exponential moving average) of 19,550.
The index has shown some smart recovery from the day's low and formed a bullish engulfing pattern on the downtrend on September 27, after two rangebound sessions, which is a bullish reversal pattern, raising the possibility of an up-move in the coming sessions.
The Nifty50 scaled 52 points to 19,716, and the BSE Sensex climbed 173 points to 66,119, while the Nifty Midcap 100 and Smallcap 100 indices gained 0.75 percent and 1 percent.
On the sectoral front, the Nifty Bank recouped over 400-point losses to close down just 36 points at 44,588, while the Nifty IT index added 124 points to 32,595.
Stocks that performed better than the broader markets included CE Info Systems, APL Apollo Tubes, and Granules India. CE Info Systems extended an upward journey for the third straight session, rising 7 percent to end at a record closing high of Rs 1,897 and formed a long bullish candlestick pattern on the daily charts with robust volumes, after days of consolidation.
APL Apollo Tubes has gained a strong momentum after a Doji candlestick pattern and formed a strong bullish candlestick pattern on the daily scale with above-average volumes. The stock rallied 5.5 percent to Rs 1,630 and closed above the 21-day EMA. It was already above the short-to-long-term moving averages.
Granules India closed at a 10-month high of Rs 350, up 4 percent and formed a robust bullish candlestick pattern on the daily charts with strong volumes. The stock has seen a breakout of falling resistance trendline adjoining highs of December 23 last year and September 25 this year, and trading well above key moving averages.
Here's what Jigar S Patel of Anand Rathi Shares & Stock Brokers recommends investors should do with these stocks when the market resumes trading today:
Since the last couple of weeks, Granules have started gaining momentum. Recently, it broke its weekly swing high of approximately Rs 328 and is sustaining above it.
On the indicator front, the weekly MACD (moving average convergence divergence) has given a bullish crossover just above the zero line, along with the weekly DMI (directional movement index) bullish cross, which is hinting further upside in the counter.
One can buy in the range of Rs 345–350 for a target of Rs 385 and a stop-loss of Rs 327 on a daily close basis.
Though MapMyIndia looks lucrative due to its recent up-move, one needs to be cautious since it is trading near its historical high of Rs 1,911. Also on the indicator front, the weekly MACD looks exhausted, which hints towards some profit booking in the coming sessions.
Thus, one should look to book profits in the zone of Rs 1,850–1,950 and avoid aggressive long bets.
A couple of sessions ago, the counter had made Doji candlesticks just near the Ichimoku Cloud, followed by a big green candle, thus confirming a bullish bias in the counter. Additionally, it is trading above all key exponential moving averages (i.e., 21-50, 100-200), which further confirms the bullish stance on the counter.
On indicator front, daily RSI (relative strength index) has reversed from 40 levels which is looking lucrative. Thus, one can buy in the range of Rs 1,615–1,635, with a target of Rs 1,750 and a stop-loss of Rs 1,565 on a daily close 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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