Sector wise, buying was seen in Capital Goods, IT, Metals and Public Sector stocks. The S&P BSE Mid-cap index was up 0.8 per cent while the S&P BSE Small-cap index ended 1.5 per cent higher.
The stocks that were in focus included names like
Which rose more than 8 percent, which was about 4 percent, and which closed with a gain of more than one percent on Monday.
Vishal Vasant Wagh, Head of Research, Bonanza Portfolio, shares what investors should do with these stocks when the market resumes trading today:
Root Mobile: Buy | Target: Rs 1443
Root has made a classical ‘Bullish Diversion’ on the RSI. The stock price has managed to bounce back from recent lows with strong volumes. It has outperformed about 78 per cent of the previous swing top.
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Going forward, any cross above Rs 1443 would give additional confirmation that the recent trend has changed from bearish to bullish. Additional support has been observed by Donchain (21). The price has started staying above the middle of the price range. Even the EMA (13) has given a bullish signal with a close above it.
On the higher time frame, the formation of the chart is still bearish, so the expected move will be a relief rally in the bear market until it turns into a higher high and a higher low is formed. However, a bullish divergence is also available in the weekly chart.
It took only three trading sessions for the price change on a daily basis to reverse the more than 78 percent move seen in the formal 10 trading sessions.
This makes a strong case for periodic reversal. At higher levels, the target would be Rs 1443 and once the Rs 1443 hurdle is crossed, the next level would be Rs 1548.
Timken: Buy on Dips
After the increase from Rs 1888 to Rs 2730,
More than 50 percent have retreated. The volume was stronger in the first up move, and this is a clear indication of the start of an impulse wave.
A strong closure following any retracement will become a buying opportunity for the stock.
As far as RSI is concerned, it has shown strong support at 50. The 13-day EMA has moved up and the slope for the said EMA has also turned sharp.
Volume is supporting today’s move. A breakout above the downward sloping trend line also indicates an upcoming continuation of the bullish move.
On the higher time frame, Timken is resuming higher highs/lows on the weekly chart. Taking things together, a stop loss below Rs 2220 and recent high with target of Rs 2730 can be a long sight in Timken. The stock closed at Rs 2411.
Ambuja Cements: Wait and See
Ambuja started a strong move from a low of Rs 288.50 to Rs 391. Thereafter, there is a sideways correction in the triangle pattern.
Triangle patterns are known to time corrections and higher frequency trends for breakouts in the direction of the previous trend. 38.20 percent retracement has been completed in this process.
The RSI has moved above 50. The current reading is 55 and remains above 9EMA. Today, the stock has moved above the 13 EMA, hence a follow-up is required for the price to break the downward sloping line of the triangle which is currently at Rs.367.
Need to wait and watch for close above Rs 367 with good volume and post follow for stock entry.
(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent the views of The Economic Times)