The market started off the day lower and was about to reverse some of previous day's gains, but there was a smart recovery in late trade which ultimately helped the benchmark indices continue their upward journey for the third straight session on March 8. Banks, auto, oil and gas and FMCG stocks supported the up-move.
The BSE Sensex climbed more than 100 points to 60,348, while the Nifty50 gained more than 40 points to settle tad above 17,750, after taking support at 17,600, which is expected to be crucial for further downside in the market. The index has formed a bullish candlestick pattern with long, lower shadow on the daily charts, indicating buying on dips.
The Nifty Midcap 100 and Smallcap 100 indices also traded higher on Wednesday, rising half a percent and 0.2 percent amid mildly positive strength.
Stocks that we have selected for trade spotlight included PNB Housing Finance which jumped over 6 percent to Rs 623.5, the highest closing level since October 14, 2021 and formed strong bullish candlestick pattern on the daily charts with above average volumes. The stock has seen a breakout of upward sloping resistance trendline adjoining highs of January 13 and February 17, 2023.
BHEL shares gained more than 4 percent to close at Rs 78 and formed long bullish candle on the daily charts after two-day consolidation, with above average volumes. It traded above all key moving averages (9, 50, 100 and 200-day EMA - exponential moving average).
GE Shipping was also in focus, rising over 4 percent to Rs 607 and formed long bullish candlestick pattern which resembles Bullish Engulfing kind of pattern on the daily charts with above average volumes. It has seen a breakout of downward sloping resistance trendline adjoining highs of December 21 last year and March 2 this year.
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:
On December 21, 2022 it registered a top of Rs 749. Since then, it has been making the lower top and lower bottom structures which resulted in a 29 percent cut in price. During February 2023, it has made a nice base near Rs 560-580 levels.
On a daily scale, a Bullish Engulfing candlestick pattern was seen near mentioned support zone of Rs 580 levels thus confirming a bullish stance for coming sessions.
On indicator front, daily RSI (relative strength index) has displayed bullish regular divergence along with MACD (moving average convergence divergence) bullish crossover further confirming our bullish view on the counter.
One can buy in a small tranche in the range of Rs 600-610 and another around Rs 580-590 for an upside target of Rs 670 and stop-loss of Rs 570 on a daily close basis.
In its previous trading session (March 6), BHEL has taken out its 3-month-old trendline thus making it more lucrative at current levels. Moreover, it has cleared Rs 74 levels i.e. historical resistance quite comfortably.
It is trading above most of the daily moving average exponential (200-100-50-26 day) thus confirming our bullish view on the counter.
From the indicator point of view, daily RSI has made an impulsive structure along MACD displaying a positive crossover which further compliments our bullish view.
One can buy in the range of Rs 76-78 with an upside target of Rs 85 with a stop-loss of Rs 72 on daily close basis.
Since last 9 months, the said counter has given a whopping return of approximately 96 percent. At the current juncture, it is approaching near its historical resistance of Rs 635-640.
Profit booking is expected near mentioned above levels. Additionally, on a weekly scale MACD is overstretched thus hinting towards profit booking / pullback in coming sessions.
One can book profit near Rs 640 zone. As of now, no fresh longs are advised.
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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