After a healthy recovery from the August lows by taking support at 19,300 and getting back above the 50-day exponential moving average (EMA) of 19,560, the market seems to be ready to surpass 20-day EMA of 19,662 in the coming sessions. If the index holds these levels, then 19,800, followed by 20,000 is a possibility on the Nifty50, experts said, adding that the 19,500-19,300 area is expected to act as a support zone.
The higher highs, higher lows formation for the second straight session, and the dragonfly doji or hammer kind of candlestick pattern formation at the downtrend, which are bullish reversal patterns, also confirmed positivity in the market.
On October 6, the Nifty50 jumped 108 points to 19,654, and the BSE Sensex climbed more than 360 points to 65,996, while the Nifty Midcap 100 and Smallcap 100 indices gained six-tenth of a percent and eight-tenth of a percent respectively.
Among sectors, Bank Nifty added 147 points to 44,361, while the Nifty IT index climbed more than 200 points to 32,342, getting back above the 20-day EMA, which is a positive sign.
Stocks that were in action on last Friday include Kalyan Jewellers India, Chalet Hotels, and Paytm. Kalyan Jewellers ended at a record closing high of Rs 258 on the NSE, up more than 10 percent with healthy volumes. The stock has formed a long bullish candlestick pattern on the daily charts and traded way above all key moving averages (20, 50, 100 and 200-day EMA).
Chalet Hotels also saw a record closing high of Rs 609, up 2.65 percent and formed a bullish candlestick pattern on the daily scale with healthy volumes. The stock traded well above all key moving averages, while during the last week, it climbed over 9 percent and formed robust bullish candlestick pattern on the weekly scale.
Paytm has seen a breakout of downward sloping resistance trendline adjoining highs of August 25 and September 11 in the beginning of trade and formed a long, bullish candlestick pattern on the daily timeframe with above-average volumes. The stock was up 3.7 percent to Rs 928 on Friday, while for the week, it rallied over 8 percent with a robust bullish candlestick pattern formation.
Here's what Rajesh Palviya of Axis Securities recommends investors should do with these stocks when the market resumes trading today:
One 97 Communications (Paytm)
On the daily and weekly time frame the stock is in uptrend forming a series of higher tops and bottoms indicating bullish trend. Currently the stock is well placed above its 20, 50, 100 and 200-day SMA (simple moving average) which reconfirms bullish sentiments.
On the weekly line chart, the stock has witnessed "multiple resistance" breakout at Rs 910 levels indicating positive bias. Rising volumes signifies increased participation in the rally. The daily, weekly and monthly strength indicator RSI (relative strength index) is in positive terrain which shows rising strength.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 1,000-1,070 with downside support zone of Rs 850-810 levels.
The stock is in strong uptrend across all the time frames forming a series of higher tops and bottoms indicating strong uptrend. The stock has recently recaptured its 50-day SMA (Rs 206) which remained a positive sign. The daily "Bollinger band" buy signal indicates increased momentum.
Huge rising volumes supports increased participation. With current close, the stock is poised for short term consolidation (Rs 262-212) breakout at Rs 262 levels. The daily, weekly and monthly strength indicator RSI is in positive terrain which shows rising strength.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 285-310 with downside support zone of Rs 235-200 levels.
Chalet Hotels
The stock is in strong uptrend across all the time frames forming a series of higher tops and bottoms indicating strong uptrend. Currently the stock is well placed above its 20, 50, 100 and 200-day SMA which reconfirms bullish sentiments.
With last week's strong gain the stock has decisively broken out its four-week's multiple resistance zone of Rs 575 levels on a weekly closing basis indicating positive bias.
The daily and weekly "Bollinger band" buy signals shows increased price momentum on the short term charts. Huge volumes on this breakout signals increased participation. The daily, weekly and monthly strength indicator RSI is in positive terrain which shows rising strength across all the time frames.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 640-700 with downside support zone of Rs 580-540 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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