Profit booking may continue ahead of Budget
Wait for further uptrend from current levels; 80,100 and 79,800 would be the key supports zone, above which market could rally up to 80,700-81,000. On the flip side, below 79,800, market could retest the levels of 79,500-79,100
Mumbai: On the last day of the week, benchmark indices continued positive momentum as BSE Sensex was up by 522 points. Among sectors, FMCG, and IT indices registered strong momentum, both the indices rallied over 3 percent whereas despite strong market momentum Metal and Reality indices witnessed selling pressure at higher levels.
Metal index shed 2.78 per cent and Reality index was down by 2.40 per cent. Technically, after range-bound activity on last Friday, the Nifty successfully surpassed 28,0100 resistance zone and post breakout positive momentum intensified. In addition, bullish candle on weekly charts and range breakout texture on intraday charts indicating further uptrend from the current levels. Amol Athawale, V-P (technical research), Kotak Securities, said: “We are of the view that 80,100 and 79,800 would be the key supports zone for the trend following traders. As long as the index is trading above the same, bullish sentiment is likely to continue.”
On the higher side, market could rally up to 80,700-81,000. On the flip side, below 79,800 the sentiment could change. Below the same, the market could retest the level of 79,500-79,100. For Bank Nifty now, 20-day SMA (Simple Moving Average) or 52,100 would be the trend decider level. If it sustain above the same, then it could move up till 53,000-53,500. On the other side, below 52100 uptrend would be vulnerable. The markets remained well supported, with minor volatility being induced by profit booking and participants weighing the trend of upcoming earnings season
Dr Joseph Thomas, head (research), Emkay Wealth Management, says: “Towards the close of the week markets trended higher on the back of earnings season getting kicked-off on a positive note, and better than expected inflation numbers in the US.” The current phase of volatility can’t be ruled out as profit booking may continue ahead of the Budget, that will provide more clarity on the policy continuity.“Markets were encouraged by TCS Q1 results, which triggered a massive rally in other IT stocks and drove Sensex close towards the 81000 mark in early trades. However, profit taking in realty and other sectoral stocks trimmed the gains as investors cut their positions amid stretched valuations after the recent spike,” says Prashanth Tapse, senior V-P (research), Mehta Equities.
STOCK PICKS
BSOFT | CMP: 732.35 | SL: 715 | TARGET: 775
The stock has given a strong breakout above its swing high resistance mark of 725.35 and has successfully managed to close above the same. With the price breaking out above its resistance levels and volumes rising to nearly 3 times its average (30) days traded volume, the RSI (14) on the daily time frame being around 66 shows good momentum conditions for the stock. We can see targets of 775 and above with a set stop loss at the 715 mark.
WIPRO | CMP: 560.15 | SL: 550 | TARGET: 590
The stock has given a strong breakout above its swing high resistance mark of 548.80 and has successfully managed to close above the same. With the recent swing low being around 550, this level should serve as a strict stop loss for the stock. We can see potential upside targets of 590 and above. The RSI (14) being around 76.89 shows high momentum conditions for Wipro.
(Source: Riyank Arora, technical analyst at Mehta Equities)
CMP (Current Market Price); SL (Stop Loss)/All prices in Rs