Given the momentum favourable for bulls and the index sustained above the upward sloping resistance trendline, the market is expected to face resistance at the 22,600-22,700 levels in the coming sessions with support at 22,400 and then 22,300, experts said.
On March 6, the benchmark indices ended at a fresh record closing high on the back of strength in banking and financial services and technology stocks. The Nifty 50 rallied 118 points to 22,474, and formed a bullish candlestick pattern on the daily charts, while the BSE Sensex climbed 409 points to 74,086.
However, the broader markets underperformed the benchmark indices as the Nifty Midcap 100 index fell half a percent and Smallcap 100 index 2 percent.
Stocks that outperformed broader markets and fared better than benchmark indices included Tata Chemicals, ICICI Prudential Life Insurance Company, and Axis Bank. Tata Chemicals maintained the uptrend for the fifth consecutive session and surged 11 percent to Rs 1,178 on Wednesday after breaking out of a long downward sloping resistance trendline adjoining highs of October 11, 2022 and January 5, 2024. The stock has formed a robust bullish candlestick pattern on the daily charts with significantly higher volumes.
ICICI Prudential Life Insurance Company climbed 4.2 percent to Rs 577 and formed a long bullish candlestick pattern on the daily timeframe with healthy volumes. The stock traded above all key moving averages with 50-day EMA (exponential moving average) moving above 200-day EMA, which is a positive sign.
Axis Bank rose 2.2 percent to Rs 1,125 after breakout of horizontal resistance trendline, and formed long bullish candlestick pattern on the daily charts with strong volumes. The stock traded above all key moving averages and is very close to its downward sloping resistance trendline adjoining highs of December 13, 2023 and January 8, 2024, which is crucial for further upward move towards record high of Rs 1,151.85.
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 last few days, Tata Chemicals has experienced a remarkable rally, with its stock price surging approximately 270 rupees, leading to a notable return of 30 percent within this short period. This rapid ascent has undoubtedly enhanced the appeal of the stock, drawing attention from investors enticed by its recent upward trajectory.
However, despite the current attractiveness of the counter, it is imperative to exercise caution due to the significant resistance looming around Rs 1,200-1,205 range, primarily identified through the presence of a previous historical high depicted in the chart analysis.
Therefore, initiating fresh long positions at this juncture is not advisable. For individuals who have already entered the market, it is prudent to consider booking profits and adopting a wait-and-see approach, anticipating a meaningful correction in the stock's price before contemplating further investment actions.
ICICI Prudential Life Insurance Company
After reaching its peak around Rs 616, ICICI Prudential underwent a substantial decline of approximately 153 rupees, marking a significant 25 percent decrease. Subsequently, it found support within the range of 50 percent to 61.8 percent Fibonacci retracement levels, as indicated on the chart.
Recently, the stock broke above a bearish trendline following a consolidation period lasting approximately two weeks, occurring near the 100 EMA (exponential moving average) on the weekly scale. This breakout suggests a favourable opportunity for investors, presenting an attractive entry point.
It is advisable to consider buying in two stages: first, within the range of Rs 570-580, and then near Rs 555-565 if the stock retraces. The upside target is set at Rs 620, with a stop-loss placed around Rs 540 based on daily closing prices.
In recent weeks, Axis Bank has undergone an impressive rally, witnessing a substantial increase in its stock price by approximately 112 rupees, resulting in a notable return of 11 percent within a short span. This surge has undoubtedly caught the attention of investors attracted by the recent upward momentum.
However, despite the current allure of the stock, the caution is warranted due to significant resistance expected in Rs 1,130-1,150 range, primarily based on the presence of a previous historical high evident in chart analysis.
Therefore, initiating new long positions at this juncture is not advisable. For those already invested, it would be prudent to consider profit-taking and adopting a wait-and-see approach, anticipating a meaningful correction in the stock's price before considering further investment decisions.
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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