Sectorally, 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 closed with gains of 1.5 per cent.
Stocks that were in focus included names like
which rallied more than 8 per cent, which was up nearly 4 per cent, and which closed with gains of over a per cent on Monday.
Here’s what Vishal Vasant Wagh – Research Head, Bonanza Portfolio recommends investors should do with these stocks when the market resumes trading today:
Route Mobile: Buy | Target: Rs 1443
Route has formed a classical ‘Bullish Diversion’ on RSI. The stock price has managed to bounce back from the recent low with strong volumes. It has almost retraced 78 per cent of the last swing top.
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Going forward, any cross above Rs 1443 will give additional confirmation that the recent trend has changed from bearish to bullish.
Addition support has been witnessed by Donchain(21). The price has started to sustain above the middle of the price range. Even EMA (13) has also given a bullish indication with a close above it.
On the higher time frame, the chart formation is still bearish so the expected move will be a relief rally in the bear market till it does not change to a higher high and higher low formation. Though, bullish diversion is also available there in the weekly chart.
The price move on a daily basis has taken only three trading sessions to retrace more than 78 per cent of the move seen in the formal 10 trading sessions.
It creates a stronger case for reversal time-wise. On the higher side, the target will be Rs 1443 and once the Rs 1443 hurdle gets crossed, the next level will be Rs 1548.
Timken: Buy on dips
Post an up move, from Rs 1888 to Rs 2730,
has retraced more than 50 per cent. The volume in the first up move was stronger, and that is a clear indication of the start of an impulse wave.
Any retracement followed by a stronger close will become a buy-on-dip opportunity for the stock.
As far as RSI is concerned, it has shown stronger support at 50. The 13-day EMA has crossed upward and the slope has also turned bullish for the said EMA.
Volume is supporting today’s move. A breakout above the downward sloping trend line also indicates the upcoming continuation of the bullish move.
On the higher time frame, Timken is resuming higher high higher low on the weekly chart. Putting things together, one can go long in Timken with stop loss below Rs 2220 and target of recent high Rs 2730 levels. The stock closed at Rs 2411.
Ambuja Cements: Wait & Watch
Ambuja started a strong move up from the lows of Rs 288.50 to Rs 391. Post that, there is a sideways correction in the triangle pattern.
Triangle patterns are known for their tendency of time correction and higher frequency for a breakout in the direction of the previous trend. In the process, 38.20 per cent retracement is completed.
RSI has moved above 50. The current reading is 55 and it is sustaining above 9EMA. Today, the stock has moved above 13 EMA so follow-up is necessary for the price to breach the downward sloping line of the triangle currently at Rs 367.
One needs to wait and watch for closing above Rs 367 with decent volume and follow up post that for entry in the stock.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)