The market is expected to see near-term healthy support at 19,600, from where the Nifty50 showed strong rebound on last Friday, and the crucial support is likely at 19,300, the low of the previous week ended October 4, while on the higher side, 19,800-19,850 may act as a critical hurdle. Unless the index decisively takes out this long range, trading is more likely to be within a range, experts said.
On October 13, the Nifty50 declined 43 points to 19,751 and formed a bullish candlestick pattern with minor upper shadow on the daily charts as the closing was lower than opening levels.
The BSE Sensex fell 126 points to 66,283, while the Nifty Midcap 100 and Smallcap 100 indices were down 0.1 percent and 0.44 percent.
Stocks that bucked the trend included Tata Motors, Gujarat Alkalies, and Welspun Corp. Tata Motors has seen a decisive breakout of downward sloping resistance trendline adjoining highs of July 26 and September 20, and jumped 4.7 percent to end at a record closing high of Rs 667. The stock has formed a robust bullish candlestick pattern on the daily charts with healthy volumes and traded above all key moving averages (20, 50, 100 and 200-day EMA - exponential moving average), which is a positive sign.
Gujarat Alkalies, too, has seen a healthy breakout of falling resistance trendline adjoining multiple touchpoints and formed a bullish engulfing pattern on the daily charts, with strong volumes. The stock gained over 5 percent to Rs 766 and traded above all key moving averages.
Welspun Corp shares rallied for the fourth consecutive day, rising nearly 5 percent on last Friday to Rs 440.60, the highest closing level since April 25, 2008. The stock has formed long bullish candlestick pattern with strong volumes on the daily scale and remained well above all key moving averages.
Here's what Rajesh Palviya of Axis Securities recommends investors should do with these stocks when the market resumes trading today:
Gujarat Alkalies and Chemicals
On the weekly chart, the stock has decisively broken out its 8-10 months multiple resistance zone of Rs 750 levels on a closing basis indicating strong come back for bulls. This breakout is accompanied with huge volumes indicating increased participation.
Recently the stock has recaptured its 20 and 50-day SMA (simple moving average) and rebounded sharply indicating buying force near the support zone.
The stock is also sustaining above its 100 and 200-day SMA which reconfirms medium to long term bullish trend. The daily and weekly "Bollinger band" buy signal suggests increased momentum. The daily, weekly and monthly strength indicator RSI (relative strength index) is in positive terrain which shows rising strength.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 840-900, with downside support zone of Rs 720-700 levels.
On the daily chart, the stock has confirmed "Rounding Bottom" formation on a closing basis . This breakout is accompanied with huge volumes indicating increased participation. The stock is well placed above its 20, 50, 100 and 200-day SMA which reconfirms bullish sentiments.
The stock is in strong uptrend across all the time frames forming a series of higher tops and bottoms, representing bullish sentiments.
The daily "Bollinger band" buy signal suggests increased momentum on the short term chart. The daily, weekly and monthly strength indicator RSI is in positive terrain which shows rising strength.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 700-740, with downside support zone of Rs 650-630 levels.
The stock is in strong uptrend across all the time frame forming a series of higher tops and bottoms indicating bullish sentiments. The stock has recaptured its 20-day SMA and rebounded sharply.
Since past four months huge rising volumes signifies rising participation. The stock is well placed above its 20, 50, 100 and 200-day SMA which reconfirms bullish sentiments. The daily, weekly and monthly strength indicator RSI is in positive terrain which shows rising strength.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 461-485, with downside support zone of Rs 400-370 levels.
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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