The market turned volatile after a day of rally, and closed with moderate gains on February 9 due to a lack of fresh triggers. Select banking & financial services, and technology stocks supported the market, whereas metal and select auto, FMCG and pharma stocks witnessed a flux.
The BSE Sensex rose more than 140 points to close above 60,800, and the Nifty50 gained 22 points at 17,893, forming a Doji pattern on the daily scale indicating indecision among bulls and bears about future market trends.
The subsiding volatility continued to support the market sentiment as India VIX, the fear index, reached 13.04 level, down 4.08 percent from 13.60, while the broader markets closed flat.
Stocks that handily outperformed broader markets included Jubilant Foodworks which climbed more than 3 percent to Rs 458, a tad higher than 9 EMA (days exponential moving average - Rs 455) and formed a bullish candle on the daily charts by making higher high higher low formation, but still way below long term moving averages (50, 100 and 200-day EMA).
One 97 Communications (Paytm) was another stock that we selected for the trade spotlight. It climbed more than 4 percent to Rs 706, the highest closing level since October 11, 2022, continuing the uptrend for the fourth straight session. With the consistent rally, the stock has surpassed all short-term as well as long-term moving averages, forming a bullish candle with upper and lower shadows on the daily charts with higher high higher low formation for the fourth day in a row.
JSW Energy jumped 5.5 percent to Rs 236.35 and formed a bullish candle on the daily charts with above-average volumes, especially after four days of consolidation. Also, it has broken the downward-sloping small resistance trendline adjoining the highs of January 20 and February 1.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
After a long correction, eventually the stock took support near Rs 420 and reversed sharply. Post reversal, this week, the stock rallied nearly 7 percent. A promising reversal formation indicating a pullback rally is likely to continue in the near future.
For the momentum traders now, Rs 450-445 would act as a sacrosanct support zone. As long as it is trading above Rs 445 the chances of hitting a 20-day SMA (simple moving average) or Rs 475-480 would turn bright.
On the flip side below Rs 445, uptrends would be vulnerable.
This week so far, the stock rallied beyond 35 percent. Post 570 breakout, it intensified the positive momentum. After a long time, it succeeded to trade above the 200-day SMA and formed a long bullish candle on weekly charts which is largely positive.
The short-term texture of the chart is positive but mildly overbought. For the bulls, Rs 750-765 would be the key resistance zone, whereas Rs 650-645 could be the important support zone for positional traders.
However, below Rs 645 uptrends would be vulnerable. Buying on dips and selling on rallies could be the ideal strategy for short-term traders.
In this quarter so far, the stock corrected over 18 percent. After a long correction, the stock took support near Rs 220 and reversed. However, the short-term texture of the chart is still on the downside.
We are of the view that above Rs 230, the pullback rally is likely to continue till 20-day SMA (simple moving average) or Rs 250.
On the flip side dismissal of Rs 230 could accelerate the selling pressure. Below the same, chances of hitting Rs 220-215 would turn bright.
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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