Considering the impressive rally led by technology stocks in the market last Friday (January 12), experts suggest that the market is poised to reach the 22,000-22,100 zone in the coming days before potentially entering a consolidation phase. Support is expected to move slightly higher to the 21,800-21,700 area, while the crucial support level remains at 21,500.area while the crucial support remains at 21,500 levels, experts said.
On January 12, the benchmark indices achieved a record closing high, with the Nifty 50 gaining 247 points to reach 21,894.5. The daily charts exhibited a bullish candlestick pattern, indicating a formation of higher highs and higher lows for yet another session.
The BSE Sensex climbed 847 points to 72,568, but the broader markets underperformed frontline indices as the Nifty Midcap 100 and Smallcap 100 indices gained 0.4 percent each.
Stocks that recorded healthy gains and better than benchmarks & broader markets included HCL Technologies, Firstsource Solutions, and IRFC. HCL Technologies has seen a decisive breakout of horizontal resistance trendline and climbed 3.8 percent to end at record closing high of Rs 1,540.8. The stock has formed long bullish candlestick pattern on the daily charts with strong volumes, while the stock traded way above all key moving averages (20, 50, 100 and 200-day EMA - exponential moving average), which is a positive sign.
Firstsource Solutions also participated in the IT rally, rising 10.4 percent to Rs 210, the highest closing level since October 19, 2021, and formed robust bullish candlestick pattern on the daily charts with significantly higher volumes.
IRFC extended uptrend for third consecutive session with healthy bullish candlestick pattern on the daily charts and the volume remained above average for yet another session. The stock jumped 6 percent to end at record closing high of Rs 113.4.
Here's what Rajesh Palviya of Axis Securities recommends investors should do with these stocks when the market resumes trading today:
Indian Railway Finance Corporation
On the weekly chart, the IRFC broke above the 'Rounded Bottom' pattern at Rs 92 in mid-December 2023 and consolidated for the past three weeks. Last week, it surpassed the small consolidation range between Rs 105-94, signalling a continuation of the uptrend post-breakout.
The daily and weekly RSI (relative strength index) indicators are in a bullish mode, indicating rising strength.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 123-130 with downside support zone of Rs 108-103 levels.
On the weekly chart, FSL broke above the 'multi-year resistance' level at Rs 192, a barrier in place since January 2022. This breakout is accompanied by an increase in volume activity, indicating an influx of market participation.
The prior resistance zone around Rs 192 is expected to function as a support zone, aligning with the "Principle of Change in Polarity" in technical analysis.
Additionally, the weekly RSI strength indicators are in a bullish mode, holding above their reference line, indicating rising strength.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 230-250 with downside support zone of Rs 197-190 levels.
On the weekly chart, HCLTECH broke above the 'Bullish Flag' pattern at Rs 1,490 with a strong bullish candle, signalling the continuation of an uptrend. The breakout is accompanied by an increase in volume activity, suggesting a surge in market participation.
The stock is establishing higher highs and higher lows, maintaining its position above the medium-term upward-sloping trendline, indicating a continued uptrend.
The weekly strength indicator RSI is in a bullish mode and holding above its reference line, suggesting a positive bias.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 1,630-1,700 and downside support zone of Rs 1,490-1,450 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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