After a recent spate of consolidation, the Nifty50 returned to previous week's high in the range of 19,800-19,850 with a higher high, higher low formation and sustaining above the 20-day EMA (exponential moving average) of 19,701. Hence, if the index gives a strong close above 19,850, then 19,900-20,000 can be possible levels on the higher side in coming sessions, provided it takes support at 19,700 mark, experts said.
The Nifty50 climbed 80 points to 19,812 and formed a bearish candlestick pattern on the daily charts as the closing was lower than opening levels, while the BSE Sensex jumped 261 points to 66,428.
The broader markets remained in a positive terrain for yet another session with strong breadth. The Nifty Midcap 100 and Smallcap 100 indices gained 0.35 percent and 0.88 percent.
Stocks that fared better than broader markets and benchmarks included IRFC, APL Apollo Tubes, and SBI Life Insurance Company. IRFC has given a breakout of horizontal resistance trendline adjoining multiple touchpoints after several days of consolidation, and rose 3.7 percent to Rs 79 on the NSE. The stock has formed bullish candlestick pattern with minor upper shadow on the daily charts, with trading above all key moving averages (20, 50, 100 and 200-day EMA) and with above average volumes.
APL Apollo Tubes climbed over 3 percent to Rs 1,775 and has formed long bullish candlestick pattern on the daily scale with above average volumes after breakout of horizontal resistance trendline adjoining highs of September 12 and October 16. Further, it traded above all key moving averages, which is a positive sign.
SBI Life Insurance Company, too, has seen a breakout of horizontal resistance trendline adjoining multiple touchpoints and formed long bullish candlestick pattern with above average volumes. The stock gained 2 percent at Rs 1,348 and traded above all key moving averages.
Here's what Viraj Vyas of Ashika Stock Broking recommends investors should do with these stocks when the market resumes trading today:
The stock has been on an upward trajectory since the COVID-19 market decline. However, in the recent past, the stock underwent a period of correction, both in terms of time and price, within a broad range of Rs 1,350-1,100.
Currently, the stock is making an attempt to break above Rs 1,345 levels, which marks a 161.8 percent extension of the COVID-19 decline.
Over the past few weeks, the stock has made multiple attempts to surpass this level but has been unable to do so. A weekly closing above this level could introduce fresh bullish momentum.
The stock has maintained a robust uptrend since the beginning of the current year, experiencing a significant rise from Rs 1,050 to approximately Rs 1,800. While the stock recently entered a consolidation phase over the last few weeks, the swift recovery from the lows of Rs 1,550 indicates strong investor interest in buying the stock during pullbacks but a follow-through above previous life high will have bullish implications.
This stock holds a dominant market position within its segment and is poised to benefit from the current real estate surge, making it an appealing long-term investment opportunity.
However, it's essential to exercise caution in the near term, particularly if the stock drops below Rs 1,500 levels.
Indian Railway Finance Corporation (IRFC)
The stock had a relatively quiet debut on the exchanges in 2021 and spent a considerable amount of time in a consolidation phase. However, in 2023, the stock initiated a strong rally, surging from Rs 30 to Rs 90. Currently, the stock is undergoing a period of time correction, forming a base above the 21-day EMA (exponential moving average).
It's worth noting that the stock appears to be overbought, and as a result, it might be advisable to refrain from making new entries at this point.
For those who are already holding the stock, maintaining a stop-loss at Rs 72 could be a prudent approach.
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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