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Expert suggests strategy on these three stocks
Technically, the Nifty 50 is almost on the verge of an upward sloping long support trendline. Hence, the index may try to defend the trendline. In case the index breaks the same, then 21,500 is expected to be an immediate support, but on the higher side, if the index holds above the trendline, then 21,700-21,800 can be a resistance zone, experts said.
On February 12, the Nifty 50 plummeted 167 points to 21,616 and formed long bearish candlestick pattern on the daily charts, while the BSE Sensex was down more than 500 points to 71,072. The broader markets hit hard as the Nifty Midcap 100 index tanked 2.5 percent and Smallcap 100 index plunged 4 percent.
Stocks that bucked the trend included Zydus Lifesciences, HCL Technologies, and Apollo Hospitals Enterprises. Zydus Lifesciences rallied 6.4 percent to end at record closing high of Rs 857 and formed strong bullish candlestick pattern on the daily charts, with robust volumes, while on the monthly basis, it has continued run up for fourth consecutive month.
HCL Technologies, too, ended at new closing high of Rs 1,667, up 2.2 percent and formed bullish candlestick pattern on the daily timeframe with above average volumes. On the monthly charts, the stock maintained upward journey for seventh consecutive month.
Apollo Hospitals Enterprises, also, saw record closing high of Rs 6,614.5, rising 2.75 percent and formed long bullish candlestick pattern on the daily charts. The stock maintained upward bias for third days in a row, with strong volumes.
Here's what Ashish Kyal of Waves Strategy Advisors recommends investors should do with these stocks when the market resumes trading today:
Pharma sector continued to shine. Amongst the pharma companies, Zydus Life is outperforming. Currently, the stock is trading at the life time high.
On the daily chart, prices which were moving in an upward sloping channel has given a breakout of it, which is a positive sign. Also, base line (red) of the Ichimoku cloud has acted as a brilliant support which is near Rs 775 levels. So, as long as price holds above mentioned level, medium-term trend is likely to remain positive.
In short, trend for Zydus Life remains positive. Since RSI (relative strength index) is in overbought territory, so buy on dips looks prudent strategy with the targets of Rs 875 as long as Rs 820 holds on the downside.
Apollo Hospitals Enterprises has shown strong upside momentum since past few months. We have used Supertrend indicator on the daily chart. The Supertrend is acting as a reliable support.
In addition, it has consistently offered support which can be seen in the below chart. This indicates that, as long as this line is protected, one should follow the current trend. Along with this, ADX (average directional index) is also suggesting that good momentum is likely to continue as it is showing reading of 48 which is above 25.
In short, trend for Apollo Hospitals is bullish. Use dips as a buying opportunity for a move towards Rs 6,700 as long as Rs 6,160 holds on the downside.
HCL Technologies is currently trading at the record high. Middle Bollinger bands is acting as a strong support which is near Rs 1,585 levels. Adding to the positive outlook, the MACD (moving average convergence divergence) indicator recently showed a bullish crossover, signaling that bullish momentum can continue in the next few trading sessions.
In short, outlook for HCL Tech is bullish. Dips can be used as buying opportunity for a move to Rs 1,750 levels as long as Rs 1,585 holds on the downside.
Follow Ashish Kyal on Twitter - @kyalashish
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