Market texture is extremely volatile

Mumbai: On Tuesday, the benchmark indices corrected sharply. After a sharp decline, BSE Sensex was down by 4,390 points. Among sectors, almost all the major sectoral indices witnessed profit booking at higher level but PSU Banks and Energy indices lost the most. PSU Bank shed 14.50 percent, while Energy index was down by 11.8 percent.

Technically, after early morning sharp selloff the market breached the crucial support of 20-day SMA (Simple Moving Average) or 74,000 and post breakdown the selling pressure intensified. In addition, on daily charts the index has formed long bearish candle and is also trading below short term and medium-term averages, which is largely negative.

Shrikant Chouhan, head (equity research), Kotak Securities, said: “For the traders now, 50-day SMA or 73,500 and 74,000 would be the key resistance areas, while 71,000-70,200 would act as key intraday supports zones. We are of the view that the current market texture is extremely volatile and uncertain. Hence, it is advisable that traders should remain cautious for next few trading sessions.”

Dalal Street experienced a bloodbath as with Sensex and also seeing significant losses. Investors were disheartened as the BJP failed to secure a majority on its own in the 2024 Lok Sabha elections, despite the NDA achieving an overall majority.

“The market remains uncertain and volatile, with the India VIX surging 31 per cent to above 28 levels Top gainers included HUL and Britannia, while Adani Ports and ONGC were among the biggest losers,” says Prashanth Tapse, senior VP (research), Mehta Equities Ltd. As the market grapples with election uncertainties, investors are hoping for a stable government to ensure policy continuity and economic stability.

STOCK PICKS

PFC

Trade: Buy| CMP: 426.75 | SL : 400 | TARGET : 500

The stock touched the lower end of its rising wedge support mark at 425 and successfully managed to close above the same. With the overall trend being positive and the stock offering attractive risk reward opportunity at current levels, the stock looks like a strong buy with strict stop loss placed at 400 level for upside potential targets of 500 and above.

BEL

Trade: Buy | CMP: 255.55 | SL : 225 | TARGET : 300

The stock has touched its trendline support mark of 240 on its daily charts and successfully managed to close above the same. With the overall trend being positive and the stock making higher highs and higher lows, it appears that at current levels the stock is offering attractive risk-to-reward opportunities with a strict stop loss at the 225 mark for upside targets of 300 and above.

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

CMP (Current Market Price); SL (Stop Loss)/All prices in Rs