Charts signal further uptrend

Mumbai: In this truncated week, the benchmark indices witnessed positive momentum as BSE Sensex was up by 730 points. Among sectors, IT index outperformed rallied 4.60 per cent whereas PSU Banks and Media indices shed over two per cent. Technically, post short-term correction, the market took the support near 50-day SMA (Simple Moving Average ) or 79,000 and bounced back sharply.

A promising reversal formation on daily and weekly charts and long bullish candle on daily charts are indicating further uptrend from the current levels.

Amol Athawale, V-P (technical research), Kotak Securities, said: “For the trend following traders 79,900 and 79,700 would act as a key supports zone. Above the same, the bullish formation is likely to continue. On the higher side 80,600 and 81,000 would be the key resistance areas for the bulls. However, below 79,700 level, the uptrend would be vulnerable.”

Prashanth Tapse, senior V-P (research), Mehta Equities, said: “Positive US economic data like cooling inflation and robust retail sales numbers shrugged off recession fears while talks of a rate cut by the US Fed as early as next month fuelled a mega rally across global equities, including India. While local markets remained in positive territory throughout the session, buying opportunities emerged for local investors after the recent slump with banking, IT, auto, metal and realty stocks leading the upsurge.”

Vaibhav Vidwani, research analyst, Bonanza Portfolio, said: “Domestic major indices closed on a positive note, with the Sensex surging by 1,330 points. All sectoral indices ended in the green, reflecting a broad-based rally. The BSE Midcap and Small cap indices also rose by over 1%, indicating strong investor sentiment across various market segments. Market participants were buoyed by favorable global cues, with Asian markets showing gains following a positive performance in the US. As probability of rate cut is increasing in September that brought optimism in overall market and supported IT stocks.”

STOCK PICKS

Tata Steel | Buy: Rs149.52 | SL: Rs145 | Target: Rs157.50

Tata Steel has shown a rebound from key support levels near Rs145, with increasing volumes signalling strength. The stock is positioned for a potential rally towards Rs157.50, supported by positive momentum in the metals sector. A buy at Rs149.52 is recommended, with a stop loss at Rs145 to manage downside risk.

Kotak Bank | Buy: Rs1,777.30 | SL: Rs1,740 | Target: Rs1,825

Kotak Bank is maintaining its position above crucial support at Rs1,740, with improving volume trends. The banking sector outlook remains positive, giving Kotak Bank a good probability of reaching the target of Rs1,825. A buy is advised at Rs1,777.30, with a stop loss at Rs1,740.

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

CMP (Current Market Price); SL (Stop Loss)/All prices in Rs