The market closed with six-tenth of a percent loss on March 20, erasing all its Friday's gains after correction in Asian counterparts on the back of the Credit Suisse-UBS deal.
The BSE Sensex fell more than 360 points to 57,629, and the Nifty50 declined over 110 points to close at 16,988, but there was nearly 1 percent recovery from the day's low.
The index has formed a bearish candle with long lower shadow which resembles hammer kind of a pattern formation on the daily charts for the second consecutive session. It is a bullish reversal pattern, raising the possibility of rebound in coming sessions.
Most of sectors closed in the negative terrain, whereas FMCG was the only gainer. We have seen more correction in broader markets compared to benchmarks, with the Nifty Midcap 100 and Smallcap 100 indices declining 1 percent each.
Stocks that outperformed the broader markets included Rallis India which seems to have formed a bottom last week and climbed 4.5 percent to Rs 202 on March 20. The stock has formed long bullish candle on the daily charts with above-average volumes, closing above nine and 21-day EMA (exponential moving average). The trading volume was strong after more than two months.
BPCL was also in action, rising 2.35 percent to Rs 360 and formed bullish candle with long lower shadow on the daily charts, indicating support-based buying in the stock. The trading volumes remained strong in last three days, with the stock coming back above all key moving averages.
Gujarat State Petronet was down moderately to close at Rs 269.55 and formed High Wave kind of pattern on the daily charts, but overall, the stock has been forming higher highs higher lows since October last year.
Here's what Vidnyan Sawant of GEPL Capital recommends investors should do with these stocks when the market resumes trading today:
Despite experiencing a significant downtrend characterized by a pattern of lower lows and lower highs, BPCL's stock prices have been able to establish a strong support level between Rs 295-350 since May 2021, indicating a degree of stability.
Now the recent breakout of the Rectangle pattern indicates a reversal to the upside, while the breakout is followed by a shortfall in the rectangle pattern which indicates enthusiasm behind the prices for breakout.
The stock has surpassed the 200-day EMA which confirms the reversal to the upside.
The RSI (relative strength index) on both daily as well has on weekly has sustained well above 50 mark reflects the rising momentum behind the prices.
We recommend traders and investors to buy this stock for the target of 400 where the stop-loss must be Rs 340 strictly on the closing basis.
The stock after a downtrend from August 2021, now has started to get into Higher High, Higher Low formation, this illustrates an improving undertone of the prices.
The change in the polarity of the prices around Rs 255 level suggest the beginning of the trend to the upside.
The stock has also witnessed a golden cross of 50 & 200-day EMA which confirms the start of an up move.
The momentum indicator RSI on the Daily time frame is hovering between 40 – 65 which illustrates presence of positive momentum.
We recommend traders and investors to hold this stock with a stop-loss of Rs 253 level for the further up move till Rs 300, where immediate resistance can be found.
The overall trend in the Rallis is in clear downtrend which can be observed through the trend line which the prices have respected since July 2021.
The stock had indicated a continuation of the prior downtrend in the last week of January 2023 post the breakdown of Descending Triangle pattern.
The stock has breached below the key variable supports of 50 & 200-day EMA.
RSI on the daily timeframe has sustained well below 50 mark reflect lack of positive momentum. Traders and investors are advised to exit this stock.
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