Market May Fall Further

Mumbai: The benchmark indices continued to experience a profit booking at higher levels, with the Sensex was down by 548 points. Among sectors, all the major sectoral indices traded in the red, but the Realty index lost the most, shedding over 3 per cent. Technically, after a muted opening, the market slipped below 77,600, and following this breakdown, selling pressure intensified. Additionally, a bearish candle was formed on the daily charts, indicating further weakness from the current levels.

Shrikant Chouhan, head (equity research), Kotak Securities, said: “We believe that the current market texture is weak, but a fresh sell-off is only possible if the 20-day SMA or 77,000 is dismissed. Below this level, it could retest the range of 76,700-76,500.” On the other hand, 77,600 would be the key resistance zone for the bulls. Above this level, the pullback could extend up to 77,800.

Prashanth Tapse, senior V-P (research), Mehta Equities, said: “Markets displayed pessimism since early trades as stocks crumbled amid subdued corporate earnings and the ongoing uncertainty over global tariff war.”

With the rupee showing no signs of cooling off, foreign investors have continued to take the exit route in order to invest in safe haven US financial assets, thus weighing heavily on market sentiment. As valuations remain expensive, mid & small-cap stocks continue to take hammering.

STOCK PICKS

Zomato| TRADE-BUY | CMP: Rs227.25 | SL: Rs219 | TARGET: Rs240

Zomato is currently trading near its anchor VWAP support, which suggests strong buying interest at lower levels. The stock has seen consolidation around this level, indicating potential for an upward move. RSI (14) is at 44.50, showing that the stock is in a neutral zone but approaching oversold territory. A bounce from the current levels could push the price towards the 240 target in the near term. A break below 219 may weaken momentum, making stop loss crucial.

Suzlon| TRADE-BUY | CMP: Rs52.72 | SL: Rs46 | TARGET: Rs62

Suzlon is holding above a key trendline support, suggesting a possible reversal from lower levels. The stock has been under pressure, with RSI (14) at 38.90, indicating near oversold conditions. A bounce from the current level could lead to a short-term rally towards 62 if buying interest picks up. If the trendline support holds, the stock may witness a strong recovery, backed by improving sentiment. A close below 46 would invalidate the bullish outlook, triggering stop loss.

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