60,700 pts a support level for day traders

Mumbai: On Monday, the benchmark indices opened with a gap up, but due to lack of follow through buying interest, it corrected sharply in the morning session. Eventually it took support near 60,500 and reversed sharply. Monday's intraday session was volatile and non-directional. Among sectors, strong buying was seen Private Banks, PSU Banks and Financial stocks.

Amid Private Banking stocks, ICICI Bank rallied the most, over 10 percent. While profit booking continued in Reality Auto and selective mid cap stocks. Technically, post short-term correction, the index consistently taking support between 60,700 or near 20-day SMA. On intraday charts, it has maintained lower top formation which is broadly negative for the Sensex.

"We are of the view that, the short-term structure is weak, but quick pullback rally is not ruled out, if the index succeeds to trade 60,500-60,700. Once again, 60,700 would act as a sacrosanct support level for the day traders, above the same we can expect extension of pull back rally up to 61,400-61,700. On the flip side, below 60,700 or below 20 day SMA uptrend would be vulnerable," says Shrikant Chauhan, head of equity research (Retail), Kotak Securities

Stock Picks

♦ CUB: Above Rs177 with a target of Rs179 and Stop loss of Rs175. The stock is in upward trending channel and has given the breakout.

♦ CHOLAHLDNG: Above Rs695 with a target of Rs702 and Stop loss of Rs689. It has support of 8 and 40 EMA.

♦ ERIS: Above Rs810 with a target of Rs818 and Stop loss of Rs802. The stock is in upward trending channel and is on the verge of a breakout.

♦ ESCORTS: Above Rs1,495 with a target of Rs1,509 and Stop loss of Rs1,481. It has a support of 8 EMA.

♦ GRASIM: Above Rs1,710 with a target of Rs1,727 and Stop loss of Rs1,693. It has reversed from the support of 8 EMA. (Source-CapitalVia)