Charts indicating further upside
Now, the 73,450 would act as a key support level; On the higher side the market could move up to 74,200-74,300, on the flip side, traders may prefer to exit out if it falls below 73,450
image for illustrative purpose
Mumbai: Key benchmark indices extended gains despite adverse market sentiment in US and Europe, as investors focussed on domestic fundamentals and bought metal, oil & gas, auto and realty shares. “While intra-day volatility remained the order of the day, gains have been limited over the past few sessions due to investors’ cautious approach in the election season,” says Prashanth Tapse, senior V-P (research), Mehta Equities Ltd.
While volatility could increase over the next couple of weeks, selective buying in key frontline, mid & small-cap stocks will persist. The sharp fall in rupee against the dollar is a good development given the FPI outflows in the month so far, as any fresh decline in the local currency could reverse the FPI fund flows.
On Friday, the benchmark indices continued positive momentum, the Sensex was up by 253 points. Among sectors, Consumer Durable and Auto indices outperformed whereas IT index witnessed intraday selling pressure at higher levels.
Technically, after a muted opening entire day the market held positive momentum throughout the day. Uptrend continuation formation on daily and intraday charts indicating further upside from the current levels.
“For the trend following traders now 73,450 would act as a key support level. As long as index is trading above the same, the bullish formation is likely to continue. On the higher side the market could move up to 74,200-74,300,” says Shrikant Chouhan, head (equity research ), Kotak Securities.
On the flip side, below 73,450 level, the uptrend would be vulnerable. Below the same, traders may prefer to exit out from the trading positions.
STOCK PICKS
NMDC (Buy)
CMP : 277.10 | SL : 270 | Target : 290
The stock has given a strong breakout above its recent swing high resistance mark of 273.20 and successfully managed to close above the same. With the overall structure being positive and outlook on most of the metal companies being strong, we expect NMDC to extend this rally towards potential targets of 290 and above. A strict stoploss should however be kept at 270 mark to manage risk well.
NATIONAL ALUMINIUM (Buy)
CMP : 194.75 | SL : 190 | TARGET : 210
The stock has given a sharp breakout above its all-time high resistance mark of 193.70 and successfully managed to close above the same. With the volumes being equivalent to its Avg (30) days volume and RSI (14) on daily charts being around 66, the overall momentum looks strong and the stock is poised for an up-move towards 210 and above. A strict SL should however be kept at 190 mark to manage risk well.
(Source: Riyank Arora, technical analyst at Mehta Equities)
CMP (Current Market Price); SL (Stop Loss)/All prices in Rs
