Sensex may further fall

Mumbai: On Monday, the benchmark indices witnessed profit booking at higher levels. BSE Sensex was down by 250 points. Among sectors, Media and PSU Bank indices corrected sharply, and both

indices corrected over two per cent. Technically, near 20-day SMA, the Sensex consistently witnessed profit booking, a bearish candle on daily charts, and a close below 60,500 indicating further weakness from the current levels.

“For the traders now, 60,700 would act as a key resistance zone below the same, the Sensex could slip till 60,000-59,900,” says Shirkant Chouhan, Head of Equity Research (Retail), Kotak Securities.

On the flip side, a fresh uptrend rally is possible only after the dismissal of/ 0.700, above which, the market could move up to 60,900-61,000.

Prashanth Tapse, research analyst at Mehta Equities said: “Sentiments continued to remain weak with investors sitting on the sidelines ahead of key inflation numbers in India and the US. Almost all the sectoral indices tumbled hard in today's session with maximum pain seen in IT, Realty & Metal spaces.”

Adani Ports and Adani Enterprises continued to be on top losers list in today's trade as well amidst the route that has recently haunted the group. Domestic retail inflation data is due later in the day and US inflation data is due tomorrow. While uncertainty over the Adani conglomerate continues to add to concerns in domestic markets. We expect the markets to remain range-bound until fresh clues for buying emerge. With third-quarter earnings seasons nearing an end, expect fund managers to reshuffle their portfolio in line with the earnings.

Stock Picks

m ITC: Buy, CMP Rs374.1, Target Rs393, SL Rs365

A Flag chart formation after the sharp up move is formed and post consolidation the breakout is very likely in the near term for a new leg of the bullish trend.

m RELIANCE: BUY, CMP Rs2,324.55, Target Rs2,440, SL Rs2,275

On daily time frame, the stock had been into an accumulation phase post its correction. Therefore, strong reversal from the current levels is very likely in the coming trading sessions.

m LT: BUY, CMP Rs2,203, Target Rs2,310, SL Rs2,155

A breakout of the symmetrical triangle chart pattern with incremental volume activity is seen on the daily charts, which indicate the start of a new bullish up move in the near term.

m HAL: BUY, CMP Rs2,448, Target Rs2,570, SL Rs2,400

The stock is into a gradual up move post its declining trend and the rising trend suggest bullish momentum to continue in the coming horizon.

m POONAWALLA: BUY, CMP Rs3,02.4, Target Rs320, SL Rs295 For the past few sessions, the counter is trading in a range-bound mode. However, the recent bullish activity near the upper boundary of the range suggest at a likely breakout move in the near future.

(Source-Kotak Securities)