Sharp uptick after a couple of days consolidation, especially backed by banking and financial services, along with continuation of higher highs formation and closing above crucial support of 19,650 on September 7, indicates that the Nifty50 may sustain its upward journey in the coming sessions, possibly towards its record high, experts have said, adding the 19,700-19,600 can be the immediate support levels.
The Nifty50 jumped 116 points to 19,727, and the BSE Sensex climbed 385 points to 66,266, continuing its uptrend for the fifth consecutive session. The broader markets also maintained their uptrend for nine days in a row, with the Nifty Midcap 100 and Smallcap 100 indices rising 0.8 percent and 0.5 percent, respectively.
The Bank Nifty was the leader among sectors, rising 469 points or 1 percent to 44,878 after couple of days of correction, while the Nifty IT index rose 136 points to 32,448.
Stocks that fared better than broader markets included Asahi India, Mazagon Dock Shipbuilders, and KRBL. Asahi India rebounded sharply and recouped all previous four-day losses in one session, rising 8 percent to Rs 595. The stock has formed strong bullish candlestick pattern on the daily charts, with robust volumes and trading above all key moving averages.
Mazagon Dock Shipbuilders has ended the consolidation of previous 15 days and recorded 9.5 percent gains to settle at Rs 2,088 on the NSE. The stock has formed healthy bullish candlestick pattern on the daily scale with strong volumes after a downward sloping resistance trendline breakout, which is a positive sign.
KRBL has seen a nice breakout of long falling resistance trendline adjoining highs of December 14 last year and August 10 this year in the previous session, and continued sharp uptrend for the second straight session. The index rallied 7 percent on Wednesday and 6 percent on Thursday to Rs 461, and formed healthy bullish candlestick patterns on both days.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
After the remarkable uptick of the last few weeks, the stock witnessed short-term correction. However, on daily charts, the counter has reversed its trend from its important retracement zone. The formation suggests a revival of the uptrend from the current levels.
For the traders, Rs 575 would be the key support level to watch out. Above which, the uptrend structure should continue until Rs 640.
After the sharp upward rally, the stock went into the consolidation mode, which resulted in the formation of a Flag chart pattern on the weekly scale. The recent breakout in the stock is representing a bullish continuation pattern, which is signifying a new leg of upward movement from the current levels.
For positional traders, Rs 2,005 would be the trend decider level. Trading above the same uptrend formation will continue till Rs 2,230. However, if it closes below Rs 2,005 traders may prefer to exit from trading long positions.
The stock has given a breakout of its Ascending Triangle chart pattern with a strong bullish candlestick. Additionally, on the daily charts, it has formed a higher-bottom formation, hence the structure of the stock indicates the beginning of a new uptrend from the current levels.
Unless it is trading below Rs 440, positional traders can retain an optimistic stance and look for a target of Rs 490.
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