Market holds lower top formation
For now, 74,800 would act as a trend decider level, below which the market could slip till 74300-74100. On the flip side, above 74,800, we could expect one technical bounce
image for illustrative purpose
Mumbai: On Wednesday the benchmark indices continued profit booking at higher levels the Sensex was down by 668 points. Among Sectors, Banking and Financial stocks corrected sharply while Metal and selective pharma stocks witnessed buying interest at lower levels.
Technically, after a gap down opening entire day market registered selling pressure at higher levels. On intraday charts, the market is holding lower top formation which indicating further weakness from the current levels.
Shrikant Chouhan, Head Equity Research, Kotak Securities, said: “Now for the day traders 74,800 would act as a trend decider level. Below the same, the correction formation is likely to continue Below which the market could slip till 74300-74100.” On the flip side, above 74,800 the sentiment could change. Above which, we could expect one technical bounce back till 75000-75300. Oil prices rose in Asian trading on Wednesday, buoyed by expectations that major producers will maintain output cuts at their upcoming meeting and by the seasonal increase in fuel consumption with the onset of summer.
Later in the day, Fed officials, including FOMC Members Williams and Bostic, are scheduled to speak. Tomorrow, investors will be watching for data on U.S. crude oil stock, jobless claims, and GDP growth rate estimates.
“The fourth consecutive decline as election jitters triggered intense selling The Sensex fell by 668 points to 74503 Market anxiety over potential slim election victory margins for the BJP, which could stymie reforms, led to uncertainty on Dalal Street,” says Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.
Despite the decline, India VIX slightly decreased to 24.17. Top gainers were Hindalco, Divislabs, and Powergrid, while HDFCLife, SBILife, and TechM were top losers.
STOCK PICKS
Paras Defence
Trade: Buy | CMP: 945.60 | SL: 920.00 | TARGET: 1000.00
The stock has given a strong breakout above its breakout mark of 928.00 and has successfully managed to close above it. With the RSI (14) near the 82 mark, the stock is showing a strong momentum pick-up and should likely head towards potential targets of 1000.00 and above. A strict stop loss should be kept at the 920.00 mark to manage risk well.
ITC
Trade: Buy | CMP: 430.95 | SL: 424.00 | TARGET: 442.00
The stock has touched its anchor VWAP support mark of 424 - 427 on its daily time frame charts. With the RSI (14) near the 48 mark and volumes in Wednesday’s session equivalent to its 30-day average volume, it appears that the stock should head higher towards potential targets of 442.00 and above. A strong technical structure with good volumes makes ITC a good buy at current levels.
(Source: Riyank Arora, technical analyst at Mehta Equities)
CMP (Current Market Price); SL (Stop Loss)/All prices in Rs
