Mkt texture in non-directional mode

Mumbai: Strong buying in banking stocks helped BSE Sensex sail through in a highly volatile trading session, while ended weak as investors booked profit in auto, metals, oil & gas, telecom and realty shares after the recent upsurge.

“Ahead of the Budget, markets may see stock & sector-specific activities on hopes the government may increase outlay for sectors to push growth,” says Prashanth Tapse, senior V-P (research), Mehta Equities Ltd. On Wednesday, the benchmark indices witnessed volatile trading session. After a roller-coaster activity, the Sensex was up by 36 points.

Among sectors, Reality index corrected sharply, shed over 2.75 per cent. Technically, after a gap-up opening, the index consistently is facing selling pressure at higher levels. On daily charts, it has formed a bearish candle, which indicates temporary 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 77,100 would be the crucial support zone for the day traders; below the same, we could see one quick intraday correction till 76,600 points. On the flip side, the 77,850 could be the immediate breakout levels for the bulls.” Above 77,850 level, the market is likely to move up to 78,000-78,200 range. The intraday market texture is non-directional. Hence, level-based trading would be the ideal strategy for the day traders.

STOCK PICKS

Wipro

Trade: Buy | CMP: 495.75 | Stop-Loss (SL): 470 | Target: 550

Wipro’s stock has broken out above its anchor VWAP resistance level of 480, closing firmly above this mark. The trading volume on Wednesday was nearly 1.5 times the 30-day average, and the stock surpassed its recent resistance level of 492, ending the day well above it. With the RSI (14) at 66.32, indicating an upward trend, the stock seems poised for a move towards the target of 550 and beyond. A stop-loss should be placed at 470 to manage risk effectively in this trade.

Gujarat Gas Ltd.

Buy | CMP: 612.05 | Stop-Loss (SL): 600 | Target: 700

Gujarat Gas has shown a strong breakout above its recent resistance level of 620 on the daily charts and is experiencing a retest of the breakout. With volumes matching the 30-day average, the stock looks set for an upward move towards the target of 700 and beyond. The RSI (14) at 60.56 indicates strong momentum, suggesting a likely robust uptrend. A strict stop-loss at 600 should be set to manage risk effectively in this trade.

(Source_Riyank Arora Technical Analyst at Mehta Equities)