The market succumbed to major selling pressure on February 22 after Russia issued new nuclear warnings to West, continuing downtrend for fourth day in a row. All sectors participated in the correction.
The BSE Sensex corrected more than 900 points to fall below 60,000 mark, at 59,745, while the Nifty50 plunged more than 270 points to 17,554, forming long bearish candlestick pattern on the daily charts with making lower highs lower lows for fourth straight session.
The broader markets also traded in line with benchmarks as the Nifty Midcap 100 and Smallcap 100 indices dropped over 1.1 percent on weak breadth. India VIX, which measures the expected volatility in the market, climbed near 16 level during the day, rising 11.27 percent to 15.59 level, from 14.01 level.
Stocks that were in action and outperformed broader markets included Voltas which gained 2 percent at Rs 914, continuing uptrend for third straight session, and formed bullish candlestick pattern on the daily charts. The stock came back above all key moving averages with higher highs higher lows formation for second consecutive session, but the momentum indicator RSI (relative strength index) reached near overbought levels.
Cyient was also in focus, rising over 2 percent to Rs 974, and formed bullish candle on the daily charts with above average volumes. The stock has been making higher highs higher lows formation for third consecutive session, with trading above all key moving averages.
However, Oil India shares corrected more than 2 percent to Rs 249 on the NSE and formed bullish candle with upper and lower shadows on the daily charts, indicating a bit of volatility in the counter. It has been making lower highs lower lows for third day in a row, with average volumes.
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 last 4 months approximately, the said counter has given handsome return of 25 percent. At current juncture, it is approaching towards its historical resistance of Rs 980.
In addition, on daily scale negative divergence is formed which is hinting towards possible profit booking in the counter.
So, one needs to be alert and book profit in the range of Rs 970-980. Fresh longs are not advised at current market price.
For the last 5 months approximately, the said counter has given handsome return of 60 percent. At current juncture, it is trading near its historical top of Rs 255-260 which is a stiff resistance.
In addition, on daily scale negative divergence is formed which is hinting towards possible profit booking in the counter. One should book profit in the range of Rs 250-255. Fresh longs are not advised at current market price.
Though at the current juncture, Voltas is looking lucrative, one needs to pay attention to the short-term return of 25 percent (in the last month's time) which is very unusual for Voltas.
Also, on a daily scale of RSI (relative strength index), Voltas has formed hidden divergence which is a matter of concern (refer to the chart).
From an Indicator point of view, daily MACD (moving average convergence divergence) is overstretched along with daily RSI is extremely overbought at approximately 76, thus hinting towards possible pull back in the coming few sessions.
Thus one can sell in the range of Rs 935-945 with downside target of Rs 880 and a stop-loss of Rs 970 on daily close 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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
