Bulls are roaring again as the market had a strong run-up with benchmark indices hitting fresh record highs on September 16, extending uptrend for the third consecutive session, which is attributed to the government's announcement for telecom and auto sectors.
The BSE Sensex closed above 59,000 mark and Nifty50 above 17,600 levels for the first time, gaining 418 points and 110 points respectively, outperforming the broader markets which closed with moderate gains.
Among sectors, the Nifty Bank gained the most with 2.22 percent rally as PSU Bank index spiked 5.4 percent and Private Bank rose 2.67 percent, while FMCG and Financial Services rallied over a percent each.
Stocks that were in focus or action included cigarette-hotel-to-FMCG major ITC that rallied 6.83 percent to close at Rs 230.75, private sector lender IndusInd Bank, which rallied 7.34 percent to close at Rs 1,131.25. Also, hypermarket chain Avenue Supermarts shares hit a fresh record high of Rs 4,099 on Thursday, before closing with gains of 2.82 percent at Rs 4,094.35.
Here's what Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities Ltd, recommends investors should do with these stocks when the market resumes trading today:
The stock has rallied over 7 percent on September 16. After a strong opening, the stock quickly surpassed Rs 220 medium-term resistance level with strong volume activity. Post breakout it maintained positive momentum throughout the day and succeeded to close above the same which is broadly positive for the ITC.
In the short term time frame, the stock has formed a strong price volume breakout pattern. The texture of the pattern suggests breakout action will continue in the near term if it succeeds to trade above Rs 220 level.
For the swing traders, Rs 220 would be the sacrosanct level, above the same, we can expect an uptrend continuation wave up to Rs 240-247.
On September 16, the stock registered a fresh 52-week high of Rs 1,186.50. In this month so far, it rallied over 13 percent, and on daily and weekly charts, the stock has formed a breakout continuation pattern which is grossly positive for IndusInd Bank.
However, on the intraday time frame, momentum indicators indicate the stock is in the overbought zone and high chances of quick short term price correction can not ruled out if stock trading below Rs 1,095.
For the next few trading sessions, Rs 1,095 could be the trend decider level for the bulls. If it sustains above the same, we can expect a continuation of uptrend up to Rs 1,185.
Further uptrend may also continue which could lift the stock to Rs 1,225. On the flip side, dismissal of Rs 1,095 could possibly trigger a quick short term correction to Rs 1,040.
Post strong uptrend rally from Rs 3,600 to Rs 4,000, the stock was trading in a narrow range. But after a strong opening, bulls again took control and due to sharp incremental volume activity, it successfully clear the resistance of Rs 4,020.
On the weekly charts, the stock has formed a strong bullish candle which is broadly positive. Further, on daily charts, the stock has formed a higher bottom series pattern which suggests a strong bullish structure is likely to continue in the medium term.
For the positional traders, Rs 3,950 should be the key level to watch, if it manages to trade above the same, then we can expect an uptrend continuation wave up to Rs 4,300-4,500.
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