Bears retained their hold over Dalal Street for the second consecutive session, pulling the benchmark indices by 1.5 percent by the end on August 22, which was in addition to the 1 percent loss in the previous session. Every sector came ahead to pull the benchmark indices down amid rising fear of more interest rate hikes by the Federal Reserve in the upcoming policy meetings, to bring the US inflation down.
The BSE Sensex fell 872 points to 58,774, and the Nifty50 dropped 268 points to 17,491, while the broader markets were also under pressure as the Nifty Midcap 100 and Smallcap 100 indices declined 2 percent and 1.6 percent respectively.
India VIX, which measures the expected volatility in the market, climbed further by 4.1 percent to 19.04 levels, giving a good support to bears.
Stocks that were in action and outperformed broader markets by a wide margin included Elgi Equipments which rallied 10.5 percent to end at record closing high of Rs 465.80 and formed large bullish candlestick pattern on the daily charts with large volumes. Now previous horizontal resistance trend line has acted as a strong support for the stock.
Hitachi Energy India ended off day's high, rising 3 percent to close at Rs 3,537, which formed bullish candle on the daily charts with above average volumes. The stock has touched its long horizontal resistance trend line during the day and then reversed some of gains. Even it has seen a breakout of the long downward sloping resistance trend line but failed to close above the same due to profit booking at higher levels.
Home First Finance Company India gained nearly 5 percent at Rs 945 and formed bullish candlestick pattern on the daily charts with above average volumes. It has also seen higher high higher low formation on Monday.
Here's what Vidnyan Sawant of GEPL Capital recommends investors should do with these stocks when the market resumes trading today:
Home First Finance Company India
By looking at the higher time frame charts of Home First, prices are forming higher high, higher low formation since March 2022.
On August 11, 2022 prices gave a breakout from Rounding bottom pattern, which is a bullish pattern, indicating a beginning of trend.
The breakout was accompanied by a Gap and higher volumes, confirming the breakout.
The Bollinger band has started to expand while prices roaming around the Upper Bollinger Band. This tells the uptrend has been established in the stock.
RSI (relative strength index) plotted on daily as well as on weekly time frame have sustained above 60 mark which reflects the strong momentum in the prices.
We recommend the trader and investor to buy this stock for a target of Rs 1,130 with the stop-loss of Rs 886, on the closing basis.
On the daily timeframe of Elgi Equipments, we can spot that prices post February 2022 consolidated in the broader range while forming Cup and Handle pattern.
Prices retested the neckline of the pattern after the breakout on August 3, 2022, which indicated the beginning of the trend on the upside.
The breakout was followed by high volumes which tells that the demand is pushing the prices higher.
Bollinger band has started to expand with the increase in the volumes which indicates that the volatility in the prices are rising for the upside move.
RSI on the daily chart have shown a range shift that reflects the rising momentum in the prices.
We recommend traders and investors to buy this stock for a target of Rs 580 with a strict stop-loss of Rs 386 on closing basis.
Hitachi Energy was in a clear uptrend while forming higher high, higher low formation. The stock is currently trading near its record high level which tells that the stock already is in a good momentum.
Post March 2022, the stock has started to consolidate in the form of Ascending triangle pattern.
In the latest trading session, stock attempted to give a breakout while failed to sustain above the breakout level.
RSI plotted on daily as well as on weekly timeframe have sustained above 50 mark which tells that the prices have strong momentum in it.
We recommend Traders and investors to hold the stock with the stop-loss of Rs 3,220 on the 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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