Level-based trading ideal for day traders

Mumbai: On Monday, the benchmark indices witnessed volatile trading session. Sensex was down by 57 points. Among sectors, realty index outperformed and rallied over 1.35 per cent whereas media index shed nearly 2 per cent. Technically, after early morning intraday selloff, the market took the support near 79,200 and bounced back sharply. However, it failed to close above 79,850 resistance zone.

Shrikant Chouhan, Head, Equity Research, Kotak Securities, said: “We are of the view that, the current intraday market texture is non-directional. Hence, level based trading would be the ideal strategy for the day traders.”

For the bulls, 79,850 would be immediate breakout zone. Above the same, market could move up to 80,100-80,400. On the flip side, below 79,500, the sentiment could change. Below the same, market could retest the level of 79,200-79,000.

Prashanth Tapse, Senior VP (Research), Mehta Equities, said: “The Hindenburg allegations now against a key official of the market regulator weighed on the sentiment in early trades, but indices recovered soon to trade higher only to give away all their gains towards the close to end marginally lower on selective profit taking. In case the row heats up further, it could impact sentiment going ahead and profit taking could continue, although global cues would still determine the broader market mood.”

Domestic market major indices ended the day on a sideways note. The market recovered from initial losses triggered by concerns over the Adani Group following the Hindenburg report. Vaibhav Vidwani, Research Analyst, Bonanza Portfolio, said: “Ola Electric share price surged 20 per cent to cross the Rs100-mark. Realty and metal stocks led the market recovery, with the Nifty Realty/Nifty Metal index gaining over 1.32 per cent /0.75 per cent. The broader market sentiment was also influenced by positive cues from Asian markets, with Japan’s Nikkei 225 and South Korea’s Kospi trading higher. Investors may remain cautious ahead of US CPI, retail sales and consumer confidence data from the US this week.”

STOCK PICKS

Birla Soft | Buy | CMP: Rs587.30 | SL: Rs550.00 | TARGET: Rs650.00

Birla Soft is exhibiting a robust technical structure, with the current market price holding strong above the key support level at Rs550.00. The stock’s recent performance suggests continued positive momentum, making it a favourable buy at the current levels. A strict stop loss should be maintained at Rs550.00 to protect against downside risk, while the stock presents potential for an upside target of Rs650.00. The favourable risk-reward ratio and underlying strength in the stock’s price action support a bullish outlook.

Axis Bank | Buy | CMP: Rs1164.30 | SL: Rs1120.00 | TARGET: Rs1200.00

The stock has recently touched its anchor VWAP support mark of Rs1130.00 and is successfully holding above this level. With the immediate trend remaining positive and the stock maintaining its position above this crucial support, a strict stop loss at Rs1120.00 is advisable. This setup offers potential targets of Rs1200.00 and beyond. The strong technical structure, coupled with a noticeable pick-up in volume, indicates promising bullish momentum.

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

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