The Nifty50 touched 200-day EMA (exponential moving average 18,830) intraday on October 26, for the first time since April, which is expected to be crucial area to watch out. If the index decisively breaks the same 18,600-18,500 can be possible targets on the downside, but in case of rebound given the index at oversold levels in terms of momentum indicator (RSI), the 19,000 is an immediate resistance, experts said.
The Nifty50 tanked 265 points or 1.4 percent to 18,857 and formed Three Black Crows candlestick pattern on the daily charts, which is bearish pattern. The BSE Sensex was down more than 900 points at 63,148, while the Nifty Midcap 100 index fell over 1 percent and Smallcap 100 index slipped third of a percent.
Stocks that performed much better than broader markets included Axis Bank, Swan Energy, and KNR Constructions. Axis Bank gained 1.7 percent at Rs 972 and formed long bullish candlestick pattern on the daily charts with healthy volumes after Inverted Hammer kind of candlestick pattern in previous session, which is generally a trend reversal pattern formed at the downtrend.
Swan Energy rallied 6 percent to Rs 329 and formed long bullish candlestick pattern on the daily scale with above average volumes. The 20-day EMA has been acting as a good support for the stock for several sessions now and in previous session, it has seen High Wave kind of pattern formation with robust volumes.
KNR Constructions has tested 200-day EMA (Rs 258) during the current week but the same acted as a good support for the stock. The stock lost 0.7 percent amid high volatility, but formed bullsh candlestick pattern with long upper shadow and small lower shadow on the daily timeframe, with above average volumes, after Doji kind of candlestick pattern in previous session.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
The counter is into a rising channel from last few sessions. Additionally, on the weekly charts the stock has given a breakout from Cup and Handle chart formation. Therefore, up move from the resistance zone for the bullish continuation rally is very likely to continue in the coming trading sessions.
For the traders, Rs 315 would be the key support level to watch out. Above which the uptrend structure should continue until Rs 355.
The stock witnessed short-term correction from the higher levels. On daily charts, the counter has reversed its trend from its important support zone. The formation suggests a revival of the uptrend from the current levels.
As long as the stock is trading above Rs 255, the bullish formation is likely to continue. Above which, the counter could move up to Rs 285.
The counter was into a sloping channel from the past many sessions. Eventually, its downward move stopped near the important demand zone. Moreover, the strong rebound in the counter from its demand zone on daily scale suggests that the bullish momentum to remain in the near future.
Unless it is trading below Rs 939, positional traders retain an optimistic stance and look for a target of Rs 1,040.
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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