The market closed a volatile session with around half-a-percent loss on May 31 after a 4 percent rally in previous three consecutive days, as selling pressure was seen in banking and financial services, and select pharma and IT stocks.
The BSE Sensex corrected more than 350 points to 55,566, and the Nifty50 declined 77 points to 16,585, while the Nifty Midcap 100 index fell 0.13 percent and Smallcap 100 index gained 1.24 percent.
The elevated volatility clearly indicated that there could be volatile swings in the market going ahead. India VIX, the fear index rose by 2.48 percent to 20.48 levels. Experts said it needs to fall way below 20 levels for stability in the market.
Stocks that were in action included Info Edge which surged 9.4 percent to Rs 4,164.40, Piramal Enterprises which rose 6.6 percent to Rs 1,895, and AIA Engineering which rallied 8.4 percent to Rs 2278.
Info Edge and Piramal Enterprises were top gainers in the futures and options segment, while AIA Engineering ended at record closing high on Tuesday.
Here's what Ruchit Jain of 5paisa.com recommends investors should do with these stocks when the market resumes trading today:
The stock has been forming a ‘Lower Top Lower Bottom’ structure on the weekly charts and prices are trading in a Falling Channel. The stock has shown a pullback move from its weekly '200 EMA' (exponential moving average) support, but it's yet to confirm a reversal of the trend.
Hence, until we see a ‘Higher Top Higher Bottom’ structure or a breakout from this channel, this should be just seen as a pullback move and thus short term traders should look to lighten up longs around the resistance.
The resistance for the stock is seen in the range of Rs 4,300-4,400. On the flipside, the immediate supports for the stock are placed around Rs 3,700 and Rs 3,320.
The stock has corrected sharply recently along with the broader market correction. However, the fall got arrested around the previous swing low support which was placed around Rs 1,600.
Now the stock has seen a pullback from there, but it is yet to confirm a reversal. Hence, this could just be a pullback move and the stock could face hurdles around Rs 2,000.
Traders can look to lighten up longs in this pullback around the mentioned resistance wand wait for confirmation of the trend reversal. The immediate supports for the stock are placed around Rs 1,720 and Rs 1,600.
The stock has been forming a ‘Higher Top Higher Bottom’ structure and is thus in an uptrend. The stock has seen a relative outperformance to the broader markets in last couple of months and now it has resumed its broader uptrend.
Prices exhibit a breakout on monthly charts as well as hence, we expect the stock to continue its outperformance in the near term.
Traders with existing position should continue to ride the trend while any declines in the stock towards the supports should be used as a buying opportunity.
The support for the stock is placed in the range of Rs 2,100-2,000 while the retracements indicate a probable short term target of Rs 2,390 and medium term target of Rs 2,645.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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