On the daily chart, the Nifty has formed a bullish candle that resembles the piercing formation.
After exhibiting weakness in the last couple of trading sessions, Nifty took support around the rising 20-DMA and it bounced over 220 points from day’s low to end with gain of half a per cent.
On the daily chart, the Nifty has formed a bullish candle that resembles the piercing formation. Piercing pattern is a bullish trend reversal pattern.
Going forward, the trend is likely to remain positive as long as the index holds above the 20-DMA, which is placed at levels of 17383. On the higher end, the level of 17,690 may act as immediate resistance.
Going ahead, the stock selection is going to be of paramount importance and hence, we have chalked down a list of stocks that are likely to witness a breakout.
Here is the list of stocks:
Welspun Corp: On Tuesday, the stock zoomed nearly 7 per cent on the back of heavy volumes. The stock recorded its highest single-day volume in the last five days. Interestingly, the last three months consolidation has taken a shape of a triangular pattern and a decisive move above the level of Rs 238 is likely to result into a breakout of this three months long pattern breakout. The stock is trading above its all the short and long-term moving average. At the same time, there is a desired sequence. Hence, watch out for the stock!
Uflex: The stock surged nearly 4 per cent on Tuesday. With this, it has registered a fresh closing high and it is above all its key moving averages. Interestingly, the stock is on verge of breaking out of its 19-week cup pattern. The stock’s Relative Strength Index (RSI) has reached its highest value in the last 14-days, which is bullish. The stock is clearly uptrend and the trend strength is extremely high. The Average Directional Index (ADX), which shows trend strength, is as high as 36.29 on a daily chart. Thus, keep a close watch on this stock.