Charts Indicate Bearish Bias

Mumbai: On Wednesday, the benchmark indices witnessed a profit booking for the third con-secutive day. BSE Sensex was down by 502 points. Among sectors, the Pharma index gained the most, rallied over one per cent, whereas the Media index shed over two per cent.

Technically, the market experienced selling pressure at higher levels once again. A bearish can-dle on daily charts and a lower top formation on intraday charts indicate further weakness from the current levels.Additionally, after a long time, the Nifty Index closed below the 20-day SMA (Simple Moving Average), which is largely negative for the short term.

Shrikant Chouhan, head (equity research), Kotak Securities, said: “We believe that the current market texture is weak, but a fresh sell-off is only possible if it dismisses 80,000. If it falls be-low this level, the market could slip to 79,700-79,500.”On the other hand, if it rises above 80,400, we could see a quick pullback rally up to the 20-day SMA or 80,700-81,000.”

Prashanth Tapse, senior V-P (research), Mehta Equities, said: “Investors shunned stocks led by banking ahead of the outcome of the US rate decision with focus on the Fed chairman’s com-mentary on inflation & growth outlook in the backdrop of worsening global economic situa-tion.”

Domestic rupee continuing its downward trajectory and hitting fresh lows also dampened the sentiment, as extended fall could further worsen trade deficit and hit inflation going ahead. Vaibhav Vidwani, research analyst, Bonanza, said: “Domestic stock market closed lower today, marking the third consecutive session of declines. The BSE Sensex fell by 502 points (0.62%) to settle at 80,182 while the NSE Nifty dropped 137 points (0.56%) to close at 24,198. This sell-ing pressure was exacerbated by concerns over potential trade tensions following US President-elect Donald Trump’s remarks about imposing tariffs on India.”

Additionally, market sentiment remained cautious ahead of the US Federal Reserve’s interest rate decision later in the day, with investors wary of a possible slowdown in rate cuts that could impact global liquidity. Sector-wise, financials, power, and auto stocks were among the hardest hit, reflecting broader market apprehensions as traders await clearer signals from global eco-nomic indicators.

STOCK PICKS

Prestige Estates| TRADE-BUY | CMP: Rs1888 | SL: Rs1850 | TARGET: Rs2000

The stock has shown a strong breakout above its trendline resistance at 1,850 and successfully closed well above this level. With volumes picking up significantly and the stock indicating good momentum, we expect it to move towards its next potential resistance at 2000, which serves as a target. A strict stop-loss should be maintained at 1850 to effectively manage risk in this trade.

United Spirits|TRADE-BUY | CMP: Rs1579.60 | SL: Rs1539 | TARGET: Rs1640

The stock has witnessed a solid breakout above its swing high resistance at 1561 and managed to close well above this level, forming a strong bullish single candlestick pattern on the daily time frame charts at the breakout point. A strong support is established at today’s low, around 1539, which should serve as an ideal stop-loss for this trade. The upside potential can be pro-jected toward 1640 and beyond.

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