Mkt still holding lower top formation
As long as market is trading below 72,500 the weak sentiment is likely to continue, on the other side, above 72,500 the sentiment could change and chances of hitting 72,800-73,000 would turn bright
image for illustrative purpose
Mumbai: On Wednesday, the benchmark indices witnessed roller coaster activity, the Sensex was up by 90 points. Among Sectors, Intraday recovery seen in Oil and Gas stocks as a result Oil and Gas index gained over 1 percent whereas Metal index was the top looser shed nearly 1 per cent.
Technically, after early morning intraday correction indices bounce back sharply from the day lowest points market rallied over 700 points. However, due to profit booking at higher levels it trimmed some gains and in the second half of the day and finally close near 72,100 level.
On daily charts, the index has formed long leg Doji candlestick formation and on intraday charts, it is still holding lower top formation.
“We are of the view that, as long as it is trading below 72,500 the weak sentiment is likely to continue. Below which, the market could retest the level of 71,700-71,500 ,” says Shrikant Chouhan, Head Equity Research, Kotak Securities. On the other side, above 72,500 the sentiment could change. Above 72,500, the chances of hitting 72,800-73,000 would turn bright.
Prashanth Tapse, Senior VP (Research), Mehta Equities says, “Markets displayed range-bound trend and ended marginally higher as caution prevailed ahead of the US Fed meet outcome on interest rate. While there will be little chance of rate tinkering, the Fed’s commentary on inflation and its take on interest rate will be keenly watched.”
Rising oil prices and currency losing momentum in the last few days could fuel more volatility in the near term.
Stock Picks
Indus Towers Ltd (Sell)
CMP: 250.70 | SL: 260.00 | Target: 234.00
The stock rose nearly 5 per cent, reaching its 61.8 per cent Fibonacci retracement mark. According to anchor VWAP study and chart structure analysis, the risk-reward ratio looks favorable on the short side, with a strict stop loss at the 260 mark for potential targets of 234 and below. Overall negative technical structure and weak market sentiment should bring in some weakness in the counter.
PFC - Power Finance Corporation
SELL | CMP: 361.50 | TARGET: 335.00 | SL: 376.00
The stock has broken below its recent swing low of 368 on daily charts, indicating the possibility of a strong downside move in the upcoming days. Traders are advised to maintain a strict stop loss at the 376 mark, as the stock is expected to drift down towards 335 and 325 as the downside move extends further.
(Source_Riyank Arora Technical
Analyst at Mehta Equities)
