Traders waiting for either side breakout

Mumbai: On Wednesday, the benchmark indices witnessed lacklustre activity, BSE Sensex was up by 150 points. Among sectors, Digital and IT indices outperformed rallied over 1.5 percent whereas Metal index shed over one per cent.

Technically, after a muted opening entire day market witnessed narrow range activity.

The intraday non-directional activity indicates indecisiveness between the bulls and the bears.

Shrikant Chouhan, head (equity research), Kotak Securities, said: “We are of the view that, the intraday market texture is non-directional perhaps traders are waiting for either side breakout. For the day traders, 79,300 would be the key level.”

Above the same, we could expect one quick pullback rally up to 79,500-79,750. On the flip side, below 50 day SMA (Simple Moving Average) or 78,900 the selling pressure intensified. Below which, market could slip till 23900/78500. Further down side may also continue which could drag the index till 78,300.

Prashanth Tapse, senior V-P (research), Mehta Equities, said: “Markets snapped two session falls aided by positive cues from global markets. Although broader markets were subdued to weak, strong gains in IT and select auto stocks helped benchmark indices rebound. Investors maintained a cautious approach ahead of the US CPI data to be released later and refrained from taking bullish bets to avoid any untoward risk emanating from global markets.”

Vaibhav Vidwani, research analyst, Bonanza Portfolio, said: “Indian stock markets closed on a sideways note. This movement followed a two-day decline, buoyed by optimism from the US markets, which rallied on expectations of a potential Federal Reserve rate cut in September due to softening inflation indicators. While Nifty metal was among top non performing sectorial Indices because the Supreme Court decided in favour of states, they can now demand past due royalties for land bearing minerals from the Centre and mining corporations as of April 1, 2005. Following Chief Justice of India DY Chandrachud’s delivery of the verdict on Wednesday which can impact mining companies EBITDA margin adversely.” 

STOCK PICKS

TCS | Buy: Rs 4,296| SL : Rs 4,245 |Target : Rs 4,370

For TCS, a breakout above the Anchor VWAP resistance at Rs 4,296 signals strong upward momentum, supported by a sharp rise in volumes. A positive outlook for IT stocks enhances the target potential of Rs 4,370 with a stop loss at Rs 4,245.

BSOFT | Buy: Rs 566 |SL: Rs 550| TARGET: Rs 600

For BSOFT, the stock is holding well above its major support at Rs 564, with volumes spiking from lower levels. Given the strong positive trend in IT stocks, a buy at Rs 566 is recommended with a target of Rs 600 and a stop loss at Rs 550.

(Source: Riyank Arora, technical analyst at Mehta Equities)

CMP (Current Market Price); SL (Stop Loss)/All prices in Rs