Charts Indicate Positive Bias

Mumbai: On Tuesday, the benchmark indices bounced back sharply BSE Sensex was up by 694 points. Among sectors, almost all the major sectoral indices bounced back sharply, but Metal index outperformed, rallied over 1.35 per cent. Technically, after intraday dip one more time market took the support near 78,300 and reversed.

Post reversal it not only cleared 78,800 resistance mark, but it succeeds to close above the same which is largely positive. In addition, it also formed bullish candle on daily charts, which supports further uptrend from the current levels.

Shrikant Chouhan, head (equity research), Kotak Securities, said: “For the traders now, the 78,800 would act as a sacrosanct support level. Above the same, the pullback formation is likely to continue.” On the higher side, it could move up till 80,000-80,300. On the flip side, below 78,800 traders may prefer to exit out from the trading long positions.

Markets witnessed a remarkable turnaround towards the closing hours as value buying in banking stocks along with gains in metals and oil & gas stocks aided broad market recovery. Optimism across Asian and European indices ahead of the US election outcome boosted local traders’ confidence, although medium term outlook still looks hazy due to skepticism over further rate cut by the Fed and subdued corporate earnings.

Prashanth Tapse, senior V-P (research), Mehta Equities, said: “Technically, the markets bounced back up after reaching a critical support level of 23,800, which was a key point for either holding or dropping further. This upward movement was mainly driven by news that Iran and Israel may be open to ceasefire talks, which, if confirmed, would be a huge positive for the market. Additionally, there is speculation that Trump might win the upcoming US election, and the Federal Reserve could cut interest rates by 0.25% for a second time. However, a true sign of strength would be seen if the market closes above the 24,380-24,400 range.”

STOCK PICKS

HINDALCO TRADE-BUY: Rs695 | SL: Rs660 | TARGET: Rs750

HINDALCO is positioned favorably within its technical structure, exhibiting strong support near the Rs695 level. The stock’s upward momentum aligns with positive movement indicators, suggesting continued strength toward the target of Rs750. Given the alignment of key moving averages and other trend indicators, this level offers an optimal entry point with defined risk, supported by the stop loss at Rs660.

INDUSIND BANK| TRADE-BUY: Rs1087 | SL: Rs1070| TARGET: Rs1125

INDUSIND BANK is demonstrating a robust positive trend, reflecting a favorable technical alignment for upward movement. With its stable support at Rs1,070 and a disciplined entry at Rs1,087, the stock is well-positioned to approach its target of Rs1,125. The alignment of trend indicators and supportive price levels strengthens the outlook, presenting a strategic entry for potential gains.

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