Indian market recouped losses on Wednesday and closed flat. The Nifty50 failed to hold on to 16,300 levels while broader markets recouped some losses after BSE clarification on a new surveillance framework - Add-on Price Band Framework for certain stocks.
BSE clarified that the new rules were applicable to securities in groups X, XT, Z, ZP, ZY and Y only. Besides, these securities should have a price of Rs 10 and more and the stock's market capitalization should be less then Rs 1,000 crore.
On the sectoral front, buying was seen in metals, power, energy, and oil & gas stocks while selling pressure was visible in healthcare, banks, consumer durables, and finance stocks.
Stocks that were in focus included Manappuram Finance, which closed with a loss of 12 percent, Jindal Stainless (fell over 3 percent) and Godrej Agrovet (down nearly 5 percent) on Wednesday.
Here's what Ruchit Jain, Senior Analyst- Technical and Derivatives, Angel Broking Ltd, recommends investors should do with these stocks when the market resumes trading today:
Post the recent run up, the stock have corrected sharply in this week and prices are down by more than 20 percent from its highs.
The volumes during price correction is high which is a sign of worry. Although, the stock is now trading around its 200 DMA and short term momentum readings are in oversold zone. Hence, a pull-back could be seen in the near term.
The immediate support is placed in the range of Rs. 160-155 while it its like to see resistance around Rs. 188 on pullback move.
The stock is in an uptrend as it has been forming a ‘Higher Top Higher Bottom’ structure. Prices corrected along with the other midcap names during this week, but it witnessed good buying interest at lower levels.
The stock has immediate support at Rs. 140 and existing long positions could be held with a stoploss below this support. On the higher side, the immediate resistance to watch is in the range of Rs. 163-167.
Post the recent run up, the stock had formed a ‘Doji’ pattern on the weekly chart in last week. The prices have breached the support of the pattern which has resulted into profit booking.
Although the broader trend is still intact, we can see some volatility in the near term and prices could test the supports which are placed around Rs. 620 and Rs. 600. On the flipside, the immediate resistance is seen around Rs. 675-680.
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