The market is likely to stay in the consolidation phase for a few more days, which was warranted after the benchmark indices rallied to an uncharted territory. As long as the Nifty 50 holds the low of last week (21,300) and trades below 21,800 (the record high), rangebound trade may continue, experts said, adding that the decisive breakout above 21,800 on the higher side, which is likely, can take the index towards the 22,000-22,200 levels.
On December 29, the last trading day of 2023, the benchmark indices corrected after a five-day run. The Nifty 50 fell 47 points to 21,731 and the BSE Sensex was down 170 points to 72,240, while the Nifty Midcap 100 and Smallcap 100 indices outperformed the frontline indices, rising 0.8 percent and 0.6 percent.
Stocks that fared much better than broader markets on last Friday included Olectra Greentech, Emami, and Affle India. Olectra Greentech has seen a breakout of falling resistance trendline and closed 8 percent higher at Rs 1,347. The stock has formed long bullish candlestick pattern on the daily charts with robust volumes, and traded above all key moving averages (20, 50, 100 and 200-day EMA - exponential moving averages).
After decisive breakout of downward sloping resistance trendline in previous session, Emami continued its strong uptrend for yet another session and clocked 5.8 percent gains at Rs 563.75 on the NSE. The stock has formed strong bullish candlestick pattern with robust volumes for two days in a row and remained well above all key moving averages.
Affle India has also seen a breakout of falling resistance trendline and formed long bullish candlestick pattern on the daily timeframe, with robust volumes. The stock jumped 4.3 percent to Rs 1,306 and traded 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:
Since July 2023, the stock was consolidating within Rs 1,313-1,050 levels however with Friday's strong gain, the stock has decisively broken out its "consolidation range" on a closing basis indicating positive bias. This breakout was accompanied with huge volumes which suggests increased participation.
This consolidation range was also supported with 20, 50 and 100-day SMA (simple moving average) support which reconfirms bullish trend. Past 4-5 weeks rising volumes signal huge participation near the breakout zone. The daily, weekly and monthly strength indicator RSI (relative strength index) is in positive terrain which shows sustained strength across all the time frames.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 1,470-1,560, with downside support zone of Rs 1,255-1,190 levels.
On the weekly line chart, the stock has confirmed "Cup and Handle" formation breakout at Rs 555 levels along with huge volumes. Recent buying momentum was observed from the 20, 50 and 100-day SMA support zone which remains a crucial support zone.
The daily and weekly "Bollinger band" buy signal suggests increased momentum. The daily, weekly and monthly strength indicator RSI is in positive terrain which shows sustained strength across all the time frames.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 590-630, with downside support zone of Rs 525-490 levels.
On the weekly chart, the stock has experienced trend reversal forming a series of higher tops and bottoms indicating bullish sentiments. In addition, with the past couple of week's rally, the stock has decisively broken out the triangular formation at Rs 1,185 levels indicating trend reversal.
The stock is well placed above its 20, 50, 100 and 200-day SMA and these averages are inching up along with rising prices which reconfirms bullish trend.
Rising volumes suggest increased participation. The daily and weekly "Bollinger band" buy signal suggests increased momentum. The daily, weekly and monthly strength indicator RSI is in positive terrain which shows sustained strength across all the time frames.
Investors should buy, hold and accumulate this stock with an expected upside of Rs 1,400-1,520, with downside support zone of Rs 1,230-1,200 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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