Best intraday stocks to watch out for on February 06
The Nifty rallied by over 222 points and closed above the previous day's high and is still within the Budget day range.
On a weekly chart, it closed below the 20-week average and formed a lower high and lower low candle. Friday's rally is mostly because of short-covering in many stocks. The Nifty decisively closed above the short-term averages of 5 and 8EMAs. The 20DMA is placed at 17898, which may act as immediate resistance. The RSI is still below the 50 zone. However, the MACD histogram shows an improvement in bullish momentum because of the last two days of positive close. The Elder impulse system has formed a bullish bar. We can say that the probability of a downside is limited, but the upside potential requires strong closings above the confluences of resistance. It is advised to keep the leveraged positions low. The market may see sideways action for the next two days before taking a directional bias.
Overall, the market structure is damaged on Budget day 618 points range of volatility. A close out of this range will give short-term directional bias. The Banks and Financial Services stocks led the rally on Friday, and as we expected yesterday, the VIX is down by 8.49% to 14.39%. For next week, 17900-17490 will be crucial, and either side breakout will give a directional move.
Here are the best intraday stocks to watch out for on February 6
The stock has formed a bullish engulfing on a heavy volume. It closed at the 21EMA resistance. This average acts as resistance for a long period. It is above the short-term averages of 8 and 13EMA. The RSI has developed a positive divergence near oversold conditions. The MACD has given a fresh bullish signal, while the RRG momentum is above the 100 zone and shows a gain in bullish momentum. The KST and the TSI indicators also gave bullish momentum. The Elder impulse system has formed a bullish bar. In short, the stock shows reversal signs. A move above Rs 561 is positive, and it can test Rs 590. Maintain a stop loss at Rs 551.
The stock has broken down the head and shoulders pattern on a higher volume and formed a strong bearish engulfing candle. It closed below the moving average ribbon on a daily chart and traded below all key moving averages. It is 2.53% below the 200DMA and 3.86% below the 20DMA. The Elder impulse system has formed a very big bearish bar. The MACD and TSI have given fresh bearish signals. It failed to cross above the Anchored VWAP resistance. In short, the stock registered a bearish pattern breakdown. A move below Rs 534 is negative, and it can test Rs 517, maintain a stop loss at Rs 541.
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