The market faced stiff resistance around 19,800-19,900 area, but selling pressure in the banking and financial services, oil and gas, and select technology counters weighed on the overall investor sentiment on November 17. The Nifty50 ended the week in the consolidation zone of 19,550-19,850 (support-resistance) and a breakout on either side of trade may give a firm direction to the index for the upcoming sessions, experts said.
On November 17, the Nifty50 fell 33 points to 19,732 after two-day rally and the BSE Sensex declined 188 points to 65,795, while the broader markets closed in green, with the Nifty Midcap 100 index rising 0.2 percent and Smallcap 100 index up 0.1 percent, continuing the uptrend for the twelfth and the fifth consecutive session, respectively.
Stocks that performed far better than broader markets included Varroc Engineering, FSN E-Commerce Ventures (Nykaa), and SBI Life Insurance Company. Varroc Engineering has seen a strong breakout of downward sloping resistance trendline adjoining highs of October 4 and October 23, and formed a robust bullish candlestick pattern with significantly higher volumes. The stock surged nearly 17 percent to Rs 555 and traded above all key moving averages (20, 50, 100 and 200-day EMA - exponential moving average).
FSN E-Commerce Ventures (Nykaa) was the third largest gainer in the Nifty500, rising more than 9 percent to Rs 168, the highest closing level since December 16 last year with robust volumes after breakout of horizontal resistance trendline adjoining multiple touchpoints. The stock traded above all key moving averages.
SBI Life Insurance Company ended at record closing high of Rs 1,414, up 4 percent after breakout of falling resistance trendline adjoining highs of September 18 and November 1. The stock has formed strong bullish candlestick pattern on the daily charts with robust volumes, and traded well above all key moving averages, which is a positive sign.
Here's what Rajesh Palviya of Axis Securities recommends investors should do with these stocks when the market resumes trading today:
With current week's strong gains, the stock has decisively broken out its "multi-month resistance zone" at Rs 506 levels on a closing basis indicating a strong comeback of bulls. This breakout is accompanied by huge volumes indicating increased participation.
In addition to this, the stock has also confirmed a "rounding bottom" formation indicating positive bias. Recently the stock has recaptured its 20 and 50-day SMA (simple moving average) and rebounded sharply.
The daily, weekly, and monthly strength indicator RSI (relative strength index) is in positive terrain which shows rising strength.
Investors should buy, hold, and accumulate this stock with an expected upside of Rs 585-685, with a downside support zone of Rs 520-470 levels.
With strong gains, the stock has formed a sizable bullish candle to close at the highest point of the week. With this price action, the stock has decisively broken out of its "multiple resistance" zone at Rs 158 levels along with huge volumes. The stock has also experienced a trend reversal as it has confirmed higher tops and bottoms indicating bullish sentiments.
The stock is well placed above its 20, 50, 100, and 200-day SMA which reconfirms a bullish trend. The daily and weekly "Bollinger band" buy signal suggests increased momentum. The daily, weekly, and monthly strength indicator RSI is in positive terrain which shows rising strength.
Investors should buy, hold, and accumulate this stock with an expected upside of Rs 200-220, and with a downside support zone of Rs 158-147 levels.
On the weekly chart, the stock has decisively broken out of its multiple resistance zone of Rs 1,380 levels on a closing basis indicating the continuation of the prior uptrend. Huge volumes on this breakout signal increased participation.
The stock has also witnessed an "Inverse Head & Shoulder" pattern breakout indicating positive bias. The daily and weekly "Bollinger band" buy signal suggests increased momentum. The daily, weekly, and monthly strength indicator RSI is in positive terrain which shows rising strength.
Investors should buy, hold, and accumulate this stock with an expected upside of Rs 1,560-1,610, with a downside support zone of Rs 1,370-1,300 levels.
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