Market texture still positive
Now, the 74,800 level would act as a key resistance zone, below which the market could retest the level of 74,000-73,800 range; On the flip side, above 74,800points, the market could move up till 75,100-75,300
Mumbai: Profit taking in the last hour trading saw benchmark Sensex too lost momentum after coming close to breaching its previous high level, as investors curbed their equity positions ahead of the US FOMC meet outcome. Prashanth Tapse, senior V-P (research), Mehta Equities Ltd, said: “Selling in banking, IT, metals and oil & gas stocks led the trend reversal, while strong buying in automobile and realty stocks limited the downside.”
On Tuesday, the benchmark indices witnessed volatile trading session after a roller-coaster activity. Sensex was down by 189 points. Among sectors, Auto index was the top gainer; gained 1.80 percent, whereas IT and Media indices shed over one percent.
Technically, after a strong opening, the market held positive momentum, but in the second half due to profit booking at higher levels, it corrected sharply. From the day, highest point the market shed over 200/700 points.
On daily charts, the index has formed bearish candle, which indicates strong possibility of further weakness from the current levels.
Shrikant Chouhan, Head Equity Research, Kotak Securities, said: “We are of the view that the larger texture of the market is still in to the positive side, but due to temporary overbought conditions, we could see further weakness in the near future.” Shrikant added “For the traders, now, the 74,800 level would act as a key resistance zone. Below the same, the market could retest the level of 74,000-73,800.” On the flip side, above 74,800 level, the sentiment could change. Above 74,800 level, the market could move up till 75100-75300..
STOCK PICKS
ASHOK LEYLAND
CMP: 192.65 | SL: 187.50 | Target: 220
The stock has given a strong breakout above its all-time high mark of 191.50 on its daily as well as weekly charts. With the RSI (14) being around 74, the overall momentum looks strong, and the stock is poised for an upside towards 220 and above, with a set stop loss at the 187.50 mark. Volumes in Tuesday’s session were nearly 4 times its Avg (30) days traded volume, which signals strength on the counter.
Jubilant Foodworks
CMP: 463.15 | SL: 450 | Target: 500
The stock has given a good breakout from its triangular consolidation pattern formation on the daily timeframe charts. With volumes being nearly 3 times its Avg (30) days traded volume, overall the stock is showing strong signs of momentum and strength. RSI (14) on daily being at 58 and witnessing a good uptick is indicating that the stock should eventually move towards 500 and above. A strict stop loss should be kept at 450 to manage risk well.
(Source: Riyank Arora, technical analyst at Mehta Equities)
