Focus on commodities & pharma stocks

Stock Picks

GODREJC _Above 792 with a target of 850 and Stop loss of 760. It is on the verge of a breakout of inverted head and shoulder pattern.

PEL_Above 1640 with a target of 1800 and Stop loss of 1560. There is a breakout of inverted head and shoulders pattern.

CEATLTD _Above 1272 with a target of 1350 and Stop loss of 1200. It has a major trendline breakout on daily charts

PVR_Above 1510 with a target of 1650 and Stop loss of 1450. It is ascending triangle pattern breakout on daily chart.

UBL_Above 1300 with a target of 1400 and Stop loss of 1250. It has a long-term channel breakout on daily chart.

(Source-CapitalVia)

Mumbai: On a weekly basis, the market has formed a Doji formation which is an indication of indecisiveness. Currently, the chart indicates that the market has taken a breather ahead of the major event of Union Budget, which is scheduled on February 01.

Sensex has been consolidating throughout the week but on Friday it failed to stay above the level of 49,000, which was major support for it. Although the market closed above the level of 49,000, we should keep a close eye on 48,800 levels. In case the Sensex breaks the level of 48,800, then it could fall to 47,500 levels.

On the other hand, for the market to scale higher it needs to cross 49,800 levels. However, the dismissal of 49,300 would be positive in the short term.

"Stay stock-specific as the market is consolidating. Selling short is advisable below the level of 48,800. Take a contra bet of taking long/buying positions between 47,500 and 47,700 levels. Keep a final stop loss at 47,300," Shrikant Chouhan, EVP, equity technical research at Kotak Securities.

During the week, FIIs bought more than Rs 6,000 crore of Indian equities. However, the dollar index and crude prices rose to $90.50 and $56, respectively, which is negative for the emerging market.

In the current week, the focus should be on commodities and pharmaceutical stocks, Chouhan said.