After a significant run-up in last couple of sessions, the Nifty50 is likely to consolidate before gaining strength and marching once again above 19,850 mark. If the index successfully climbs above 19,850, then all eyes will be on 20,000-20,200 area, with crucial support at 19,600-19,500 zone, experts said.
On November 16, the Nifty50 jumped 90 points to 19,765 and formed bullish candlestick pattern with long upper shadow on the daily scale, indicating a bit of profit taking at higher levels. The BSE Sensex rose more than 300 points to 65,982, while the Nifty Midcap 100 and Smallcap 100 indices gained 0.8 percent and 0.6 percent respectively.
Stocks that staged stellar performance in the Nifty500 index included CE Info Systems, Coforge, and KPIT Technologies. CE Info Systems has seen a breakout of downward sloping resistance trendline adjoining highs of October 9 and November 1 and recorded 7 percent rally to end at record closing high of Rs 2,277 on Thursday with strong volumes. The stock traded well above all key moving averages (20, 50, 100 and 200-day EMA - exponential moving average) and there is an expansion in the Bollinger band.
Coforge jumped nearly 7 percent to Rs 5,701 and formed robust bullish candlestick pattern on the daily scale with above average volumes, in addition to 5 percent rally in previous session. In fact, there was a consolidation breakout in previous session, and now the stock traded above all key moving averages, which is positive sign.
Another IT stock KPIT Technologies recorded 6 percent rally after consolidation for couple of sessions and ended at record closing high of Rs 1,480, forming strong bullish candlestick pattern on the daily scale with above average volumes. The stock remained way above all key moving averages.
Here's what Foram Chheda of ChartAnalytics recommends investors should do with these stocks when the market resumes trading today:
CE Info Systems (MapmyIndia)
CE Info Systems has demonstrated a strong breakout, surpassing the resistance level of Rs 2,269 and closing at a higher level, rendering the stock appealing for purchase. The upward momentum initiated in July briefly paused in October before a resurgence towards month-end, reaching a plateau near Rs 2,279.
During a corrective decline, the stock found support near the 50-day MA (moving average), signaling a resumption of the upward trajectory. The recent breakout, accompanied by heightened volume, reinforces a bullish sentiment.
One can consider a purchase it around Rs 2,217-2,220 levels, with a stop-loss at Rs 2,129, and a potential target of Rs 2,400.
After encountering resistance around Rs 5,635 in September, Coforge experienced a corrective downturn, finding support near the 100-day MA. Following a consolidation phase within a narrow range, the stock resumed an upward trajectory. A recent substantial upswing resulted in a breakout above the previous high, signaling bullishness.
Despite the breakout being accompanied by increased volume, the rapid ascent from Rs 5,030 to Rs 5,700 within three trading sessions suggests potential vulnerability to retracement. Should a retracement occur, the stock could become an attractive buy opportunity around Rs 5,530, with the potential to ascend towards Rs 5,900 levels.
After consolidating between Rs 1,000-1,200 for about five months, KPIT Technologies broke out from the rising channel at Rs 1,260 levels last week. Subsequently, the stock embarked on a significant uptrend, while staying above the 50-day, 100-day, and 200-day moving averages—a clear indication of a bullish underlying trend.
This upward movement has been substantiated by an increase in trading volume. The PSAR (Parabolic Stop and Reverse) remains in a buy mode.
It is advisable to retain the stock for a potential additional upswing of approximately 4 percent from the current close of Rs 1,479.95. Consider moving out if the price dips below Rs 1,370 levels.
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