Market breaks out short-term resistance
For now, the 75,000 would be a key support level, above which market could move up till 75,800-76,000; On the flip side, below 75,000 traders may prefer to exit out from the trading long positions
image for illustrative purpose
After remaining range-bound in past few sessions, benchmark indices zoomed to fresh record highs after the Prime Minister exuded confidence of winning the Lok Sabha elections with full majority that boosted the morale of the investors who had turned cautious over the past week or so.
Prashanth Tapse, senior V-P (research), Mehta Equities Ltd, said: “This came as a real booster to the markets, which had lost its sheen in recent weeks on fears of political uncertainty and its impact on growth going ahead.”
On Thursday, the benchmark indices registered a fresh all time high of 75,499.91 after a promising intraday rally the Sensex up by 1,197 points. Among sectors, almost all the major sectoral indices traded into positive territory, but auto, outperformed both the indices rallied over two per cent.
Technically, after a muted opening, the market successfully surpassed the short-term resistance of 75,000 and post breakout the positive momentum intensified. Long bullish candle on daily charts and breakout formation on daily and intraday charts suggesting further uptrend from the current level.
Shrikant Chouhan, head (equity research), Kotak Securities, said: “For the breakout, the 75,000 would be the key intraday support level above the same, the market could move up till 75,800-76,000.” On the flip side, below 75,000 traders may prefer to exit out from the trading long positions.
STOCK PICKS
Engineers India
CMP: 282.25 | SL: 272.50 | TARGET: 300
The stock has given a strong breakout above its recent swing high resistance mark of 275 and successfully managed to close above the same. With the RSI (14) rising to 73 and witnessing a good uptick on the daily charts, along with a sharp volume surge, the stock looks set for an upside move towards 300 and above. A set stop loss should be kept at the 272.50 mark to manage risk well.
IREDA
CMP: 189.05 | SL: 180 | TARGET: 215
The stock has given a good breakout above its trendline resistance mark of 185 on its daily time frame charts and successfully managed to close above the same. A strict stop loss should be kept at the 180 mark to manage risk well. This breakout, being accompanied by a good rise in the stock’s volume, also makes the trade an interesting bet at current levels.
(Source: Riyank Arora, technical analyst at Mehta Equities)
CMP (Current Market Price); SL (Stop Loss)/All prices in Rs
