The Nifty50 seems once again started making higher highs, higher low formation. If this comes true, then it may see major hurdle at 19,200-19,300 area and if that gets hold, then further rally towards 19,500-19,600 can't be ruled out, while the 19,100-19,000 can act as an immediate support for the index, experts said.
On November 2, the Nifty50 jumped 144 points to 19,133 after two-day of correction, tracking positive global cues after Fed's dovish commentary, and formed high wave kind of candlestick pattern on the daily charts, indicating the tug-of-war between bulls and bears for firm direction.
The BSE Sensex climbed 490 points to 64,081, while the Nifty Midcap 100 and Smallcap 100 indices advanced more than 1.3 percent each, with healthy market breadth.
Stocks that participated in the run and performed better than broader markets included REC, SJVN, and NLC India. REC traded well above all key moving averages (20, 50, 100 and 200-day EMA - exponential moving average), which is a positive sign. The stock ended at record closing high of Rs 302.4, up nearly 7 percent and formed long bullish candlestick pattern on the daily charts with healthy volumes, after breaking out falling resistance trendline.
SJVN has also seen breakout of downward sloping resistance trendline adjoining highs of September 20 and October 17, and traded well above all key moving averages, which is positive sign. The stock gained 5.4 percent at Rs 74.9 and formed bullish candlestick pattern on the daily charts by taking support at 20-day EMA (around Rs 71), with above average volumes.
NLC India, too, saw a breakout of falling resistance trendline adjoining highs of September 6 and October 12, and formed healthy bullish candlestick pattern on the daily charts, with healthy volumes. The stock jumped nearly 5 percent to Rs 141.65 and traded above all key moving averages.
Here's what Foram Chheda of ChartAnalytics recommends investors should do with these stocks when the market resumes trading today:
In September, NLC India reached a peak of around Rs 147-148 levels and underwent a corrective decline, finding support near the 100-day moving average (MA). A rebound occurred, and subsequent price moves led to the formation of a falling channel pattern.
The stock's price rose above the 50-day MA, signaling a bullish short-term trend. Recently, a breakout from the falling channel pattern has created a buying opportunity, with a suggested entry point at Rs 138 levels.
Investors can consider this opportunity with a potential target of Rs 150 and a stop-loss (SL) set at Rs 131 to manage risks effectively.
REC's stock has been consistently following an upward trend, marked by higher peaks and higher troughs. After reaching around Rs 294-295 levels last month, the stock underwent a corrective decline.
Recently, it re-tested the previous high but faced resistance, leading to a price drop. However, the stock found support near the 50-day moving average (MA) and resumed its upward movement. A breakout from the resistance level, accompanied by increased volume, indicates a bullish trend.
Investors are advised to maintain their positions as the stock is expected to continue its upward trajectory, potentially reaching close to Rs 327 levels.
In September, SJVN experienced a brief Double Top pattern around Rs 83-83.30, followed by a corrective decline leading to lower highs and lower lows. The stock found support near the 50-day moving average (MA), indicating a bullish near-term trend.
Subsequently, a falling channel pattern emerged, but the stock recently broke out from this pattern with increased volume, reinforcing the upward momentum.
The relative strength index (RSI) also broke its downward-sloping trendline, further supporting a bullish sentiment. Investors are advised to maintain their positions, setting a stop-loss below Rs 69 levels, and anticipate a higher target close to Rs 85 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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