The market has seen consolidation for three sessions in a row after recent recovery from the August lows and managed to close above 19,600 on the Nifty due to late-hour recovery on Tuesday, a day before the RBI's interest rate decision.
But for any upward rally ahead, the index needs to surpass the crucial 19,650-19,700 zone with much-needed contribution from banks or IT, with crucial support of 19,500-19,300 area, experts said, adding till then the rangebound session may continue.
The Nifty50 recovered 165 points from the day's low and closed with 62 points gain at 19,633, while the BSE Sensex surged 149 points to 65,996. The broader markets sustained their rise for the fifth consecutive session, with the Nifty Midcap 100 and Smallcap 100 indices gaining third of a percent and six-tenth of a percent, respectively.
The Bank Nifty also showed healthy recovery by taking support at 44,500 intraday, but still closed in the red, down 84 points at 44,881, while the Nifty IT gained for the fourth straight session, rising 115 points to 30,940 and formed a bullish candlestick pattern on the daily charts.
Stocks where we have seen better action than the benchmarks included JSW Energy, Castrol India, and Voltas. JSW Energy has seen a robust breakout after more than three weeks of consolidation and jumped 8 percent to Rs 314, forming a strong, bullish candlestick pattern on the daily charts with multi-fold jump in volumes.
Castrol India has formed Bullish Engulfing kind of a pattern on the daily charts (though not an ideal one), with strong volumes and closed at multi-year high of Rs 152.55, up 3.35 percent. The stock traded above all key moving averages (21, 50, 100 and 200-day EMA - exponential moving average), which is a positive sign.
Voltas has given a nice horizontal resistance trendline breakout on the higher side, which signals positivity in the counter. The stock has formed robust bullish candlestick pattern on the daily charts with strong volumes and settled at Rs 845.5, up 4 percent.
Here's what Jigar S Patel of Anand Rathi Shares & Stock Brokers recommends investors should do with these stocks when the market resumes trading today:
Since the last 16 trading sessions, the said counter has been consolidating in the range of Rs 285-300. In previous trading sessions, it has given a clean breakout.
On the indicator front, daily RSI (relative strength index) has rebounded from 50 levels which is a sign of further bullish bias in the said counter.
So, one can buy between Rs 305-310 with a target of Rs 335 and the stop-loss would be Rs 285 on a daily closing basis.
Castrol India has been consolidating in the range of Rs 100- 150 for the last approximately 3 years. Recently it broke the range and sustained above Rs 150 levels.
On the indicator front, the monthly MACD (moving average convergence divergence) has given a bullish cross near the zero line, so the bias would be bullish.
One can buy Castrol in the range of Rs 148-155 for an upside target of Rs 180 and the stop-loss would be Rs 135 on a daily close basis.
On a weekly scale, Voltas has formed a bullish AB=CD pattern near Rs 775-800 levels. After reversing from the said range, it has taken out its previous weekly swing high of Rs 830 levels.
Having said that, the weekly MACD has given a bullish cross near the zero line so the bias would be bullish. One can buy in the range of Rs 840-850 with an upside target of Rs 950 and the stop-loss would be Rs 799 on a daily closing basis.
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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