Larger Texture Of Market Still Weak

Mumbai: After a long correction, the benchmark indices bounced back sharply as BSE Sensex was up by 585 points. Among sectors, Media index was the top gainer, rallied over 3 per cent whereas Metal index shed nearly 1 per cent. Technically, after a muted open market took the support near 80,800 and bounce back sharply. However, the larger texture of the market is still into the weak side.

Shrikant Chouhan, head (equity research), Kotak Securities, said: “For the day traders now, 81,300 and 81,100 would be the key intraday supports zone. Above the same, the pullback formation is likely to continue.” On the higher side, market could continue the pullback momentum till 82,000-82,300. On the flip side, below 81,100 the sentiment could change. Below the same, traders may prefer to exit out from the trading long positions.

Prashanth Tapse, senior V-P (research), Mehta Equities, says: “Markets reversed its 6-session losing streak due to short covering by investors in banking, telecom, auto and realty stocks. The recovery was seen despite weak cues from Asian and European markets, although the short to medium term domestic market outlook remains hazy amid FPI sell offs and lingering West Asia conflict. All eyes will be on the RBI’s credit policy outcome on Wednesday, although there are expectations that the central bank could maintain status quo on interest rates.”

Sensex and Nifty closed on positive note, on the back of election results which supported PSU stocks and brought optimism in the market. Investors are likely to stay on the sidelines ahead of local quarterly earnings reports, Reserve Bank of India rate decision and middle-east crises. Shares of metal companies, including NMDC, NALCO, Tata Steel, and JSW Steel, fell by 3-5% after China’s state planner unveiled an economic roadmap that lacked significant stimulus measures, disappointed investors and attracted pessimism in the sector, said Vaibhav Vidwani, Research Analyst, Bonanza.

STOCK PICKS

Siemens| Trade:Buy | CMP: 7,370 | SL: 7,175 | TARGET: 7,750+

Siemens has shown a bullish momentum with a strong upward trend. The stock has been consolidating above the 7,300 mark, and the next breakout could push the price towards 7,750 or higher. The immediate support at 7,175 provides a good level for risk management with a strict stop loss in place.

Chola Fin | Trade: Buy | CMP: 1,530 | SL: 1,500 | TARGET: 1,600 & 1,640+

Chola Fin has been forming higher highs and is currently trading near its key support at 1,500. A breakout above 1,530 would confirm a bullish move towards 1,600 and further to 1,640. This stock offers a favorable risk-reward ratio with a stop loss at 1,500 for managing downside risk.

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

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