The market bounced back in last hour of trade after correction and volatility seen since the opening trade, and closed the monthly F&O expiry series in positive terrain on December 29 despite downtrend in global peers. Banking, oil & gas, and metal stocks led the benchmark indices higher.
The BSE Sensex rallied more than 200 points to 61,134, while the Nifty50 jumped nearly 70 points to 18,191, sustaining above 50-day EMA (exponential moving average - around 18,165) and formed long bullish candle on the daily charts.
But there was an underperformance in the broader space as the Nifty Midcap 100 index gained 0.08 percent and Smallcap 100 index rose 0.2 percent as breadth was slightly tilted in favour of bulls. About 1,017 shares advanced against 983 declining shares on the NSE.
India VIX, which measures the expected volatility in the market, fell by 3.8 percent to 14.81 level, from 15.40 level, making the trend favourable for bulls.
Stocks that were in the limelight and performed better than broader markets included Jindal Stainless which rallied 3.2 percent to Rs 226.3, the highest closing level since January 7, 2008, and formed bullish candle on the daily charts with higher shadow and with strong volumes.
Sharda Cropchem shares surged 10 percent to Rs 501.3 and fored strong bullish candle on the daily charts with robust volumes. It has seen a breakout of small downward sloping resistance trend line adjoining December 14 and December 21, and also breakout of horizontal resistance trend line adjoining September 20 and December 15.
Aegis Logistics was also in action, rising nearly 7 percent to Rs 352 and formed long bullish candle on the daily charts with above average volume. The stock has seen a breakout of horizontal resistance trend line adjoining several points November 28, December 7, December 9 and December 28.
Here's what Shrikant Chouhan of Kotak Securities recommends investors should do with these stocks when the market resumes trading today:
After a quick correction, the stock took the support near 50-day SMA (simple moving average) level and bounce back sharply. Post reversal, the stock rallied nearly 18 percent and also formed long bullish candle on weekly charts.
However, the short term texture of the stock is volatile and non-directional perhaps, traders are waiting for the either side confirmation.
For the bulls, Rs 520 would be the important breakout level to watch. And if, the stock manages to close above the same, it could move up to 200-day SMA or Rs 550 level. On the flip side, trading below Rs 460 may increase further weakness till Rs 415 or 50-day SMA level.
On last Thursday, the stock hit a fresh 52-week high of Rs 242.50. In this quarter the stock rallied over 80 percent and in this month alone it gained nearly 30 percent.
On daily charts, the stock consistently forming higher high and higher low series formation and comfortably trading above 20-day SMA (simple moving average) which is broadly positive. The short term texture of the stock is bullish but mildly overbought hence buying on dips and sell on rallies could be the ideal strategy for the short term traders.
For the bulls now, Rs 210 or 20-day SMA would be the immediate support zone. Above the same it could move up to Rs 250-275. On the flip side, the strong possibility of profit booking is not ruled out if it succeeds to trade below Rs 210. Below the same uptrend would be vulnerable.
After a short term correction, the stock took the support near 50-day SMA and reversed. Post reversal it has formed higher bottom formation which is broadly positive.
A long bullish candle on daily and weekly charts indicating uptrend wave is likely to continue in the near future.
For the trend following traders, Rs 330 would act as sacrosanct support level. Above the same, it could move up to Rs 370-390 levels.
On the flip side, below Rs 330, traders may prefer to exit from the trading long positions. Below which, it could slip till Rs 310-302.
