With smart recovery from the day's low and continuation of the northward journey for yet another session on October 30, the bulls seem to be regaining their strength after last week's turmoil. But, for further uptrend, experts see 19,250-19,300 as the key support area in August, which will be a critical hurdle in the coming sessions, with immediate support at 19,050, followed by 18,900-18,800 levels.
On October 30, the Nifty50 recouped 200 points from day's low to close with 94 points gains at 19,141, and formed a bullish candlestick pattern with long lower shadow on the daily charts. The BSE Sensex was up 330 points at 64,113, while the broader markets were flat with a positive bias.
Stocks that outperformed the broader markets included Prism Johnson, Welspun India, and Finolex Cables. Prism Johnson, after hitting more than three-month low, rebounded sharply and continued uptrend for third consecutive session, rising 4 percent to Rs 141.35 on the NSE. The stock has seen a breakout of downward sloping resistance trendline and formed long bullish candlestick pattern with upper shadow on the daily charts, with above average volumes, while it remained above all key moving averages (20, 50, 100 and 200-day EMA exponential moving average).
Welspun India, after breaking out downward sloping resistance trendline, remained strong and continued uptrend for fourth consecutive week. The stock on Monday rallied more than 5 percent to Rs 153, the highest closing level since January 13, 2022, and formed bullish candlestick pattern with long upper shadow on the daily charts, with robust volumes. The stock traded way above all key moving averages, which is a positive sign.
After hitting three-and-half-month low, Finolex Cables rebounded smartly in last two sessions and climbed back above 200-day EMA, which is a positive sign. The stock on Monday jumped 5.8 percent to Rs 921 and formed long bullish candlestick pattern on the daily charts, with above average volumes.
Here's what Ashish Kyal of Waves Strategy Advisors recommends investors should do with these stocks when the market resumes trading today:
In the past three days, prices have risen more than 20 percent, which makes the stock as clear outperformer. On the daily charts, we can see that prices have broken the upper Bollinger band which makes the stock bullish.
The momentum is likely to continue in the coming days and prices can move higher to Rs 145 to Rs 150 levels. Prices are moving in the upward sloping channel for several months. RSI (relative strength index) in the above chart is above 60 which is also bullish.
In the nutshell, Prism Johnson is positive and we can expect stock to move towards Rs 150 levels with support of Rs 136 levels.
Finolex cables is recovering from the steep fall it has in the past week and is retracing on the upside. However, the upward thrust needs to be fast and coming sessions will confirm if we can continue the bullish trend.
The RSI pulled back from the oversold territory. In the previous session we saw a bullish candle formed on the daily chart. Prices can go to touch Rs 985 levels, which is mid of Bollinger Bands.
The short term trend for Finolex Cables is bullish for a move to Rs 985 with support near Rs 880 levels.
The stock is currently trading at fresh record highs. On the below chart, we can see that prices are moving well within a rising channel. Recently price bounced from the channel support and completed its journey towards the upper end of the channel.
Currently prices are on the verge to give breakout of the same which is must for further bullish momentum to continue. As per Elliott wave perspective, we are moving on the upside in form wave 3 which is considered as a strongest as per guidelines.
Also, Ichimoku Cloud has acted as a support cushion to prices. As per this, nearest support is at Rs 139 which is the blue line. Any close above Rs 159 will generate further bullish momentum to continue for the target of Rs 170 or higher.
Follow Ashish Kyal on Twitter - @kyalashish
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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