A Quick Pullback Rally Possible

Mumbai: On Thursday, the benchmark indices corrected sharply, with BSE Sensex down by 964 points. Among sectors, the Pharma and Healthcare indices rallied over one per cent, while the IT, Defence, and financial indices shed over one per cent. Technically, after a gap down, the market hovered within the range of 79,200 to 79,500 throughout the day.

Shrikant Chouhan, head (equity research), Kotak Securities, said: “We believe that the short-term market sentiment remains on the weak side; However, due to temporary oversold condi-tions, we could see a quick pullback rally from the current levels.”

For traders, the key support zones are at 79,000 and the 200-day SMA (Simple Moving Average) or 78,800. If the index remains above these levels, we could see a quick pullback rally towards 79,500-79,800. Conversely, if it falls below the 200-day SMA or 78,800, below which it could slip till 78,500-78,350.

Prashanth Tapse, senior V-P (research), Mehta Equities, said: “Markets were plundered tracking negative global cues as benchmark indices slipped below their psychological levels on broad-based selling after the US Fed’s Hawkish stance raised concerns over further rate cuts next year.” Rising US bond yields has pushed global currencies, including the rupee to new lows while re-newed foreign fund outflows from domestic equities could prompt investors to turn risk averse

STOCK PICKS

Tata Consumer| TRADE-CMP: Rs907 | SL : Rs890 | TARGETs : Rs925 and Rs940

The stock is showing bullish momentum and has a strong support at 890. We expect a potential upward move towards 925 and 940. A buy position can be initiated at 906, with a strict stop-loss at 890 to manage risks.

Reliance| TRADE-CMP: Rs1,230 | SL: Rs1,210 | TARGET : Rs1,270

The stock is in a positive trend and has support near 1,210. We anticipate further upside towards 1,270. A buy position can be initiated at 1,230, with a stop-loss at 1,210 to protect against downside risks.

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