Market Still Largely Negative In Oversold Zone

Mumbai: On Monday, the benchmark indices witnessed a volatile momentum. After a roller-coaster activity, BSE Sensex was down by 112 points. Among sectors, Defence, Realty, and Metal indices gained over one per cent, whereas the Capital Market index corrected sharply, shedding over two per cent.

After an early morning intraday selloff, the market found support near 72,800 and bounced back sharply. Technically, it has formed a bearish candle on the daily charts and is still holding a lower top formation on the intraday charts, which is largely negative.

Shrikant Chouhan, head (equity research), Kotak Securities, said: “We believe that the current market texture is weak, but oversold. Hence, we could expect a quick pullback rally from the current levels.”

For day traders, 72,800 would act as a sacrosanct support zone. As long as the market is trading above this level, the pullback formation is likely to continue. On the upside, 73,400 would be the immediate resistance zone for the bulls. If the market moves above 73,300, it could rally up to 73,500-73,800. On the flip side, if it falls below 22,000/72,800, traders may prefer to exit their long positions.

The Indian, benchmark index Sensex experienced a mixed day. Initially, the market opened on a positive note, with Sensex rising over 350 points, driven by a strong start and hopes for stability following the release of Q3 GDP figures at 6.2 per cent, aligning with market projections.

Rajesh Sinha, Research Analyst at Bonanza, said: “The indices pared their gains as the day progressed, with Sensex trading at 73,085, down by 0.15 per cent, down by 0.02 per cent.”

The market sentiment remained cautious due to ongoing global uncertainties, including US tariff threats and foreign institutional investor outflows. Despite these challenges, domestic institutional investors continued to support the market by purchasing shares. Overall, the Indian stock market closed with a cautious tone, awaiting key economic data releases and global.

STOCK PICKS

Infosys (INFY)| TRADE-BUY | CMP: Rs1,708 | SL: Rs1,680 | TARGET: Rs1,740

Infosys has shown signs of stability after a pullback, holding above key support levels. The stock is attempting to rebound, despite weak momentum. With RSI (14) at 30, indicating oversold conditions with a potential for recovery, a stop-loss can be placed at 1,680, with a potential upside target of 1,740.

Larsen & Toubro (L&T)| TRADE-BUY | CMP: Rs3197 | SL: Rs3140 | TARGET: Rs3250

Larsen & Toubro is trading near its support zone and showing early signs of a rebound. The stock is consolidating after a recent decline, with buyers emerging at lower levels. With RSI (14) at 38, suggesting weak momentum, but potential for upside, a stop-loss can be placed at 3,140, with a potential upside target of 3,250.

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