The market reached closer to its crucial resistance of 21,850 after a smart recovery from the day's low on February 15. If the Nifty 50 manages to close and sustain above this, then the psychological 22,000 mark can be possible and the momentum may take the index towards a record high of 22,126, with crucial support seen at the 21,500 level, experts said.
On February 14, the Nifty 50 recovered more than 300 points from the day's low to close at 21,840, up 97 points over previous close, and formed a long, bullish candlestick pattern which engulfed the previous three candles on the daily charts. The BSE Sensex rallied 268 points to 71,823, shrugging off the weak global cues.
The broader markets also participated in the momentum as the Nifty Midcap 100 and Smallcap 100 indices gained 1 percent and 1.6 percent, respectively.
Stocks that outperformed the broader markets included SAIL, Bharat Electronics, and Karur Vysya Bank. SAIL has managed to take a support at 50-day EMA (exponential moving average - Rs 116.6) for yet another session and rallied 4.3 percent to Rs 123, forming long bullish candlestick pattern on the daily charts, after losing 32 rupees from its recent high.
Karur Vysya Bank has also taken a support at 50-day EMA (around Rs 173) for second straight session and climbed 3 percent to Rs 183. The stock fell 16 percent from its all-time high before showing the current recovery. It has formed long bullish candlestick pattern on the daily charts with above average volumes.
Bharat Electronics extended upward journey for yet another session, rising nearly 3 percent to Rs 182 and formed bullish candlestick pattern on the daily timeframe with above average volumes. The stock corrected more than 12 percent from its record high, before showing the current recovery.
Here's what Jigar S Patel of Anand Rathi Shares & Stock Brokers recommends investors should do with these stocks when the market resumes trading today:
Over the last two trading sessions, the mentioned stock has found support around its previous breakout range, indicating a level where buying interest has emerged in the past. Coincidentally, this support aligns with a bullish trendline, further reinforcing its significance.
Looking at the technical indicators, the 4-hour time scale Stochastics indicator has reversed its direction from the oversold zone, suggesting a potential bullish reversal in momentum. Consequently, this presents an attractive buying opportunity.
Traders may consider initiating long positions within the range of Rs 181-184, with an anticipated upside target of Rs 200. To manage risk, a stop-loss order could be placed at Rs 172 on a daily close basis, aiming to protect against adverse price movements.
In the recent two trading sessions, the mentioned stock has demonstrated resilience by finding support around its previous breakout range, indicating a level where buying interest has historically emerged. Notably, this support coincides with a bullish gap observed on December 26, 2023, further underscoring its importance as a significant level of potential price action.
Examining the technical indicators, the daily scale Stochastics indicator has shown a reversal in direction from the oversold zone, implying a possible shift towards bullish momentum. This development presents an appealing opportunity for traders to consider initiating long positions within the range of Rs 181-184.
With an optimistic outlook, an upside target of Rs 202 could be set to capture potential gains. However, to mitigate risk, it is advisable to implement a stop-loss order at Rs 173 on a daily close basis.
Steel Authority of India (SAIL)
In recent trading sessions, the specified stock has demonstrated resilience by establishing support within its prior breakout range, indicating sustained buying interest from investors. Moreover, it has also formed a Bullish Engulfing pattern on the daily scale near this support zone, signalling a potential shift in market sentiment towards bullishness.
Notably, this support level coincides with a bullish trendline, adding further validation to its significance as a key area of price action. An analysis of technical indicators reveals that the 4-hour time scale Stochastics indicator has undergone a reversal from the oversold zone, indicating a potential uptick in bullish momentum.
Considering these factors, this scenario presents an enticing opportunity for investors to consider initiating long positions within the range of Rs 121-123. With an optimistic outlook, an upside target of Rs 135 could be set to capture potential gains.
However, to prudently manage risk exposure, it is advisable to implement a stop-loss order at Rs 116 on a daily close basis, serving as a safeguard against adverse price movements.
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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