Market May Weaken Further

Mumbai: In the last session of the week, the benchmark indices witnessed volatile activity. Af-ter a roller coaster of fluctuations, the Nifty ended 0.97 percent lower, while the Sensex was down by 760 points. Among the sectors, the IT index lost the most, shed over 5 percent, where-as the PSU Bank index gained over 3 per cent. During the week, after the correction, the market found support near 76200 and bounced back sharply; however, it registered profit booking at higher levels once again.

Technically, on the daily and intraday charts, it is still holding a lower top formation, which suggests further weakness from the current levels. “We believe that the current market texture is weak but oversold; hence, level-based trading would be the ideal strategy for short-term trad-ers,” says Amol Athawale of Kotak Securities.

For the bulls, 76900 would act as a key resistance level. Above this level, we could see an ex-tension of the pullback rally up to 77500 and 77800, or the 20-day Simple Moving Average (SMA). On the other hand, 76300 will serve as a key support zone. Below this level, the market could slip to 76000, with further weakness potentially dragging the index down to 75700.

Prashanth Tapse, Senior VP-Research, Mehta Equities, said: “Markets remained under pressure throughout the trading session as rising US bond yields continues to create uncertainty amongst local investors. With FII fund outflows from domestic equities remaining strong, geo-political uncertainty and concerns over slow pace in US rate cuts going ahead is keep investors on the edge.”

STOCK PICKS

Zomato | TRADE- BUY | CMP: Rs248 | SL: Rs235 | TARGET: Rs260

The stock hastouched a major support mark of 240 and seeing signs of a rebound from lower levels. With the overall trend being positive and momentum being strong, the stock looks set for an upside move towards 260 and above.

Kotak bank | TRADE-BUY| CMP: Rs1758 | SL: Rs1725 | TARGET: Rs1800

The stock is seen to be consolidating in a narrow range since word quiet sometime and now looks all prepared for a breakout and move towards 1800 and above. With the price consolidat-ing nicely, momentum indicators are showing potential move towards 1800 and above.

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