Heightened volatility more likely
Reduce long positions during rallies as long as the market is trading below 81,600; Buying is advisable only at major support levels (79,000 & 78,600) with a medium to long-term perspective
image for illustrative purpose
Mumbai: On Monday, the benchmark indices displayed lacklustre activity as BSE Sensex dropping by 102 points. Intraday buying was seen in selective Midcap, healthcare, and Pharma stocks, while the Oil Gas and Reality indices experienced intraday selling pressure at higher levels.
“From a technical standpoint, the market is currently exhibiting non-directional activity around the 24,500/80,400 level following a reversal formation. With Budget Day looming, we anticipate heightened volatility”, says Shrikant Chouhan, head (equity research), Kotak Securities.
The 80,400 level serves as a critical support for the Bulls, while 81,600 could pose as the primary resistance zone for traders. A shift in sentiment may occur if the index falls below 80,000, potentially leading to a drop to 79,000-78,600, supported by retracements and the 20-day SMA (Simple Moving Average).
It is recommended to reduce long positions during rallies as long as the market is trading below 81,600. Buying is advisable only at major support levels (79,000 & 78,600) with a medium to long-term perspective. If the market surpasses 81,600, it has the potential to advance towards 82,000 and 83,000 levels.
Bank Nifty initially broke the level of 52,000, but due to the exceptional strength of HDFC bank, we saw the Bank Nifty recovering back to the previous close. It has been consolidating between 52,800 and 52,000 for the last few days, and these same levels will act as trend decider levels on Tuesday.
“After a sharp fall in early trades, markets were on a recovery mode and ended with marginal losses on profit-taking in banking, IT and realty stocks. Investors traded with caution as nervousness gripped in ahead of tomorrow’s Budget. However, markets could see volatility during the Budget announcement on Tuesday and one may see sector-based action” says Prashanth Tapse, senior V-P (research), Mehta Equities.
Vaibhav Vidwani, research analyst at Bonanza Portfolio, said that today both of leading indices Nifty and Sensex closed at marginal downside, weaker than expected numbers reported by companies like Wipro and Reliance and cautious approach opted by investors a day ahead of the union budget led market close in red.
STOCK PICKS
BHEL | Buy | CMP: 304.90 | SL: 295 | TARGET: 330 and 350
The stock is currently trading above its Anchor VWAP support level of 295, with immediate support at 300. This support level is critical for maintaining the bullish trend. The price action suggests that BHEL has found strong support at these levels and could see continued upward movement. The stock is showing signs of bullish momentum, with the RSI rising from 48, indicating potential upward movement. A stop-loss can be set at 295, with potential upside targets of 330 and 350.
ELECTCAST | Buy | CMP: 194.29 | SL: 190 | TARGET: 205 and 210
The stock is currently trading just above its Anchor VWAP support level of 192.50, with major support at 180. This support level is crucial for sustaining the bullish trend. The price action suggests that ELECTCAST has found solid support at these levels and could see continued upward movement. With limited downside risk, a strict stop-loss can be set at 190, and potential upside targets are 205 and 210.
(Source: Riyank Arora, technical analyst at Mehta Equities)
CMP (Current Market Price); SL (Stop Loss)/All prices in Rs
