After significant profit booking in the last hour of trade, resulting into a flat closing for the market on August 30, the market seems to be cautious ahead of monthly F&O expiry and June quarter GDP numbers scheduled on August 31. Hence, experts expect the rangebound and consolidation to continue on the expiry day with resistance at 19,400-19,500 levels on the higher side, and support at 19,300-19,200 levels.
The BSE Sensex rose 11 points to 65,087, and the Nifty50 gained 5 points at 19,348, while the broader markets fared better than benchmarks with the Nifty Midcap 100 and Smallcap 100 indices rallying seven-tenth of a percent and one percent, respectively, on positive breadth.
The Bank Nifty underperformed on Wednesday, losing 550 points from the day's high and closed with 263-point loss at 44,233, while the Nifty IT supported the market, rising 238 points to 31,104.
Stocks that were in action included Sterlite Technologies, BSE, and Sun Pharma Advanced Research Company. Sterlite Technologies jumped nearly 9 percent to Rs 166 and formed robust bullish candlestick pattern on the daily charts with strong volumes. The stock has seen a breakout of downward sloping resistance trendline adjoining highs of January 23 and August 7, getting back above all short-to-long term key moving averages.
BSE stock has seen a breakout of falling resistance trendline adjoining March 15 last year (record high) and August 24 this year. The stock climbed over 6 percent to Rs 967.8 and formed long bullish candlestick pattern on the daily timeframe with above average volumes.
Sun Pharma Advanced Research Company, too, has seen a breakout of downward sloping resistance trendline adjoining highs of November 9 last year and August 4 this year. The stock has formed long bullish candlestick pattern with long upper shadow on the daily charts, indicating a bit of profit booking higher levels, with robust volumes. It gained 8.5 percent to close at Rs 249.65.
Here's what Jigar S Patel of Anand Rathi Shares & Stock Brokers recommends investors do with these stocks when the market resumes trading today:
At the current juncture, BSE has made a bearish divergence on a daily scale, where RSI (relative strength index) is making lower highs and price action making higher highs.
Additionally, it is hovering near its all-time high of Rs 1,046 (refer to the chart) which will act as a massive resistance. Having said that, it is way above its all-major daily exponential moving averages (i.e., 50-100-200 days).
As we advance, there is a possibility of reversion to mean. One should book profits in the range of Rs 1,000-1,020, if already holding. Fresh longs are not advised as of now.
Since the last 3 months, the said counter has been consolidating in the range of Rs 145-155. Recently, it had given a clean breakout from the said range and is currently placed at Rs 167 levels.
Having said that, it has also cleared its downward-sloping trendline quite comfortably (refer to the chart). The best part about this reversal is that it has bounced back from its monthly central pivot range, which has acted as a massive support (the red dotted line on the chart).
One can buy in the zone of Rs 163-167 for a target of Rs 195 and the stop-loss would be around Rs 150 on a daily closing basis.
Sun Pharma Advanced Research Company
Though SPARC looks lucrative due to the recent rallies, one needs to be cautious since it is near its previous top of Rs 265. Thus, one needs to wait and watch until it does sustain above Rs 265 on a daily close basis.
If it does, then one can buy in the range of Rs 265-268 for an upside target of Rs 300 and the stop-loss would be Rs 249 on a daily close basis.
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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