The market is largely expected to remain rangebound and consolidative in coming sessions as experts feel most of the negative news have already been priced in and the participants may await the FOMC interest rate decision scheduled next week. If the Nifty 50 gives a strong closing above 21,500, then there is a possibility of upward trend towards 21,700, with support at 21,300-21,200 area, they said.
On January 25, the Nifty 50 rallied 215 points to 21,454, and formed a long bullish candlestick pattern on the daily charts, while the BSE Sensex was up 690 points at 71,060. The Nifty Midcap 100 and Smallcap 100 indices also participated in the run, rising 1.8 percent and 1.7 percent.
Stocks that performed better than the benchmark indices and broader markets included Aditya Birla Fashion & Retail, Dr Reddy's Laboratories, and Borosil Renewables. Aditya Birla Fashion & Retail has seen a nice breakout of consolidation and maintained upward sloping support trendline. The stock rallied 5.66 percent to Rs 235.3 and formed strong bullish candlestick pattern on the daily charts with healthy volumes.
Dr Reddy's Laboratories has been witnessing higher highs, higher lows formation on the daily charts, since the November lows, while holding the upward sloping support tredline. The stock climbed 4 percent to Rs 5,902 and formed strong bullish candlestick pattern on the daily timeframe with healthy volumes. It is 70 rupees away from its record high of August 24 last year.
Borosil Renewables has maintained strong upward trend for yet another session. It has seen a breakout of downward sloping resistance trendline in previous session with a strong gap up opening and closed 11.6 percent higher in previous session, followed by 7.5 percent rally on January 24 with robust volumes on both days.
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 few months, the counter has been respecting Rs 215 levels. Also, the correction from the recent top Rs 248 had very thin volume, which hints that bears are losing steam. In previous trading sessions, the said counter has gained momentum, which is looking lucrative.
On indicator, hourly scale stochastics has managed to make bullish divergence, which further confirms the bullish stance in the counter. Thus, we advise going long in the range of Rs 230–238 with an upside target of Rs 265 and a stop-loss placed near Rs 219 on a daily close basis.
Since the last few months, the counter has been respecting Rs 5,500 levels. Also, the correction from the recent top Rs 5,970 had very thin volume (refer to the chart), which hints that bears are losing steam.
In previous trading sessions, the said counter has gained momentum by clocking 4 percent gains, which is looking lucrative. On indicator, daily scale stochastics has managed to make bullish hidden divergence, which further confirms the bullish stance in the counter. Thus, we advise going long in the range of Rs 5,850-6,000 with an upside target of Rs 6,350 and a stop-loss placed near Rs 5,699 on a daily close basis.
Note: Hidden Bullish Divergence is Once price makes a higher low (HL), look and see if the oscillator (stochastics in our case) does the same. If it doesn’t and makes a lower low (LL), then we’ve got some hidden divergence in our hands.
January 2024 has been fabulous for the said counter as it has already given 38 percent return in just one month time. Having said that still lot of upside potential is seen. On monthly time frame it has taken out previous 7 months candle. Also, volume is very huge from lower levels which is making it as a lucrative buy.
On Indicator front, monthly stochastics has given bull cross just above oversold zone which further confirms bullish stance in the counter. Thus, one can buy in small tranche in the range of Rs 590-615 and another tranche in the range of Rs 550-560 (if tested) for upside target of Rs 750 and stop-loss would be placed near Rs 499 on daily close basis. (view will be 2-3 months).
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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