A sustained uptrend helped the Nifty close at the highest level in the last 16 sessions on September 4, as most of sectors participated in a rally. If this momentum continues, the index can surpass 19,650 in the coming sessions easily by taking support at the 19,400-19,300 levels, while the broader markets are expected to gather strength in the coming weeks, experts said.
The Nifty50 jumped over 90 points to 19,529, and the BSE Sensex climbed little more than 240 points to 65,628. The Nifty Midcap 100 index edged up 1 percent and the Smallcap 100 index was up 1.3 percent as the breadth was positive.
Major sectors also traded higher with the Bank Nifty rising over 140 points to 44,578, while the Nifty IT has decisively broken more than a year-long consolidation and jumped 650 points to 32,164, the highest closing level since April 22 last year.
Stocks that performed better than the broader markets included Rail Vikas Nigam, Yes Bank, and BSE. Rail Vikas Nigam has broken the upward sloping resistance trendline and jumped 11.6 percent to end at a record closing high of Rs 154.4, with significantly higher volumes. The stock has formed a long, bullish candlestick pattern with long upper shadow on the daily charts, indicating there was profit-booking at higher levels.
Yes Bank shares rallied 7.2 percent to Rs 18.60 and has formed strong bullish candlestick pattern on the daily scale. The stock has seen a decisive breakout of downward sloping resistance trendline adjoining highs of January 4 and July 24, with robust volumes.
BSE gained for sixth consecutive session and jumped 5.5 percent to end at record closing high of Rs 1,188, forming long bullish candlestick pattern on the daily timeframe. The 20-day EMA (exponential moving average) has been acting as a support for the stock since April. The trading volume in last four days was very strong.
Here's what Ashish Kyal of Waves Strategy Advisors recommends investors should do with these stocks when the market resumes trading today:
In the previous session, RVNL opened gap up and witnessed heavy buying and made a new life time high near 163.45 levels. All railway stocks witnessed good rise after new plan of Ministry of Railway to seek approval for Rs 5.25 lakh crore investment program for fiscal year 2024-2031 for better rail connectivity.
On the daily chart, prices gave breakout of the Triangle pattern as stock has given a close above Rs 144 levels. Now Ichimoku Cloud can act as a near term support which is near Rs 132 levels.
The recent rise looks to be in form of intermediate wave iii of 3. On the other hand, RSI is in overbought territory so one should use buy on dips approach to ride the trend for a move towards Rs 165-170.
In the previous session, as shown on the daily chart, stock has formed a classical reversal pattern named as Inverted Head and Shoulders which indicates bearish-to-bullish trend reversal and also suggest accumulation pattern. Now daily close above Rs 18.60 level will confirm breach of neckline of the pattern and suggests that move towards 21-22 zone has started where conservative target as per right shoulders is placed.
On the other hand, MACD (moving average convergence divergence) has also shown a positive crossover. Along with this, prices just gave a close above the cloud. Now, with follow up buying we can expect a good rally in this stock.
BSE has shown a move of more than 30 percent in just 4 trading sessions. On the daily chart, we have seen 20-day period exponential moving average is acting as a brilliant support line and it has provided support at regular intervals. So, one can continue to ride the trend as long as price holds and respects above mentioned line. So, as per this, medium term support can be placed at Rs 943 levels.
Prices also gave a breakout of the upward tilted channel. Nearest support is near Rs 1,070 levels which is near the channel. Since August 25 not a single candle has given a close below previous day’s low which suggests strength in the overall trend. For now, one can use buy on dips approach to ride the trend with the target of Rs 1,250 as long as Rs 1,070 holds on the downside.
Follow Ashish Kyal on Twitter - @kyalashish
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