Market Texture Still On Positive Side

Mumbai: On Thursday, the benchmark indices witnessed intraday profit booking at higher levels, with BSE Sensex down by 213 points. Among sectors, selective Pharma stocks registered buying interest at lower levels, while the Real Estate and Capital Market indices shed over two per cent.

Technically, after a muted open, the market faced consistent selling pressure at higher levels. On the daily charts, it has formed a bearish candle near the 50-day SMA (Simple Moving Average), which supports further weakness from the current levels. However, the short-term texture of the market is still on the positive side.

Shrikant Chouhan, head (equity research), Kotak Securities, said: “We are of the view that if the market manages to trade above 23,500/77800, it could bounce back to 78,500-78600. On the flip side, trading below 77,800 would make the uptrend vulnerable.” Below this level, traders may prefer to exit from their long positions.

Prashanth Tapse, senior V-P (research), Mehta Equities, said: “Despite logging sharp gains in the first few minutes of opening trades, markets slipped into the red and moved in a narrow range with a negative bias for most part of the trading session. Investors booked profits in rate-sensitives like realty, banking, and auto shares ahead of tomorrow’s monetary policy announcement. If there is any surprise rate cut, we may see short-term optimism.”

STOCK PICKS

BSE | TRADE-BUY | CMP: Rs5566 | SL: Rs5450 / TARGETs: Rs5850 and Rs6000

The stock has touched major support mark of 5600 and seeing signs of reversal coming in from lower levels. With the outlook on exchange stocks being positive and companies indicating signs of reversal and strength, we feel that the stock should head higher towards 5850 and 6000 odd levels once again. Strong technical structure with price touching AVWAP support mark makes the stock a good buy at current levels.

Jubilant Foodworks| TRADE-SELL |CMP: Rs693 | SL: Rs710 | TARGET: Rs660

The stock has given a good break-down below its immediate support mark of 710 and managing to close well below the same. With the structure being negative and price indicating potential downside move towards 660 and lower levels, RSI is indicating good weakness in the stock with momentum as well. Overall, we feel that the stock should head lower towards 660 and a strict SL should be kept at 710 to manage risk well.

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