Bears took the full control of Dalal Street on March 10 and dragged the benchmark indices down by 1 percent for yet another session after worries in the US banking space. Here also banking and financial services turned out to be the major culprit behind correction in the market.
The BSE Sensex tanked nearly 700 points to 59,135, while the Nifty50 plunged around 180 points to 17,413 and saw the formation of a hammer kind of candlestick pattern on the daily charts. Generally, this is a bullish reversal pattern, hence we need to see the trend in the coming sessions.
The broader markets also joined bears but the correction was less compared to benchmarks. The breadth was in favour of bears as about two shares declined for every rising share on the NSE.
The Nifty Midcap 100 index was down 0.75 percent and Smallcap 100 index fell 0.9 percent.
However, stocks that outperformed the broader markets included Adani Green Energy which was locked in 5 percent upper circuit for eighth consecutive session after taking support at around Rs 439 on February 28. The stock closed at Rs 682.7, rising 55 percent in last eight sessions in a row, and the volume on last Friday was above average volumes.
Swan Energy was also in action, climbing over 7 percent to Rs 298 and formed long bullish candlestick pattern on the daily charts with robust volumes. The stock got back above all key moving averages (9, 50, 100 and 200 EMA), with higher high higher low formation, which is a positive sign.
JBM Auto shares rose nearly 3 percent to Rs 643, the highest closing level since January 21, 2022, continuing uptrend for third consecutive session and trading well above key moving averages. The stock has formed small bodied bullish candlestick pattern with long upper shadow on the daily charts, which resembles Shooting Star kind of pattern (though not the exact one).
Here's what Foram Chheda of ChartAnalytics.co.in recommends investors should do with these stocks when the market resumes trading today:
After marking a top near Rs 374 levels, the stock price of Swan Energy witnessed a steep corrective decline. This decline halted near Rs 248 levels which coincided with the 200-day MA (moving average). The stock price rebounded which led to the development of consolidation.
Recently, the stock price made a breakout from this defined consolidation; resulting in the upside momentum. Following a breakout, the stock price retested the breakout level, indicating a resumption of the up move. This price move is attempting to move above 50-day MA (Rs 298) and is accompanied by an exponential increase in volume; supporting the bullishness in the stock.
Thus, breakout levels at Rs 283-285 are attractive to buy with a potential upmove close to 8.7 percent and stop-loss of Rs 274.
JBM Auto marked a high of Rs 674 in January 2022; a downtrend followed after that which found a base after the formation of a double-bottom in Rs 362-368 zone. The uptrend that follow saw the stock crossing above the 50-, 100-, and 200-day MA indicating the underlying trend to be bullish.
The higher bottoms of this up move have found supports at 100-DMA (Rs 485) and the recent one being at 50-DMA (Rs 542).
While the upside momentum stays intact, the stock has found resistance at the previous top near Rs 674. The lower levels near Rs 600-mark may offer attractive entry opportunities with a target of Rs 690 and stop-loss of Rs 550.
The recent Hindenburg report on the Adani group has played havoc on the charts; the kind of steep decline that followed makes it mandatory to consider a technical perspective with a longer-term horizon. The reaction to the Hindenburg report saw Adani Green Energy breaking down from a descending triangle.
The price targets were exceeded with the stock finally tried to find a base near Rs 440 levels which also happen to be pattern support as well.
Investors must hold on to this stock if purchased near recent lows with a price target of Rs 880-900 levels over a medium-term horizon while maintaining a stop-loss below Rs 439.
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