Sectorally, selling pressure was seen in metals, realty, consumer discretionary, auto, banks, and IT stocks.
Stocks that were in focus included
which closed with gains of 5 per cent, which hit a 52-week high and closed marginally higher and which ended with gains of nearly 1 per cent but with strong volumes on Monday.
Here’s what Jatin Gohil, Technical and Derivative Research Analyst at Securities recommends investors should do with these stocks when the market resumes trading today:
Adani Power Ltd: Hold
In late Jun’22, the stock tested its 38.2 per cent Fibonacci Retracement level of prior up-move (Rs 70-344), which was placed at Rs 239, and resumed its up-move.
Later, the stock not only surpassed its prior swing high of Rs 344, but also explored uncharted territory, and recorded a new high of Rs 433. The key technical indicators are in favour of the bulls on major timeframe charts.
The stock has the potential to move towards Rs 512 initially and Rs 585 subsequently, which coincides with its 100 per cent and 127 per cent Fibonacci Extension levels of prior up-move, respectively.
The risk-to-reward ratio is not favourable at the current juncture for fresh longs. However, one can hold their existing positions by trailing the stop loss.
ITC: Hold
Since Mar’22, the stock has remained upbeat, where it has moved higher respecting its 50-day EMA (Rs 295).
Currently, the stock is quite near to its long-term supply zone (Rs 320). The key technical indicators are positively poised on long-term as well as medium-term timeframe charts, while due to a steady rise, its short-term indicators witnessed a bearish divergence.
In case the stock again fails to surpass that supply zone convincingly, a short-term decline cannot be ruled out. One can hold their longs by trailing the stop loss to its 50-day EMA.
However, fresh long positions can be initiated once the stock stays firm above its long-term supply zone. A stable move above that zone could take the stock towards its lifetime-high of Rs 368 initially and Rs 400 subsequently.
Tata Communications Limited: Buy
On 19th Aug’22, the stock witnessed a trendline breakout and later extended gains, rising to an almost 4-month high of Rs 1,166. The key technical indicators are in favour of the bulls in medium-term and short-term timeframe charts.
On the higher side, the stock may face a hurdle around its 200-day SMA (Rs 1,172). However, a stable move above that moving average could lead the stock toward its prior supply zone (Rs 1,330).
In case of any decline, the stock will find support around its 50-day EMA (Rs 1,034).
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)