Positive momentum is likely to continue

Mumbai: In the last day of week, the benchmark indices continued positive momentum, the Sensex registered a fresh all time high of 74,501. Among Sectors, Media and Metal indices outperformed, Media index up by 6.70 while Metal index gained 5.30 per cent, whereas FMCG stocks witnessed some profit booking at higher levels.

Technically, after a strong uptrend rally, in this week the benchmark indices witnessed positive consolidation at higher levels. Currently, the market is holding uptrend continuation formation and it is comfortably trading above 20 day SMA (Simple Moving Average) which is largely positive.

“We are of the view that, 73,300 or 20 day SMA would be the crucial support level for the traders. Above the same, the positive momentum is likely to continue,” says Amol Athawale, Vice President – Technical, Kotak Securities.

On the higher side, the market could find the resistance at 74,600-75,200. On the other side, below 73,300 the sentiment could change. Below the same, the market could retest the level of 50 day SMA or 72,650. Further down side may also continue which could drag the index till 72,350.

For Bank Nifty, in this week it rallied over 2.90 percent and also formed long bullish candle which supports further uptrend from the current levels.

For the trend following traders now, 47,800 and 47,500 would be the key supports zones while 49,000-49,300 could be important resistance areas for the traders. However, below 47,500 traders may prefer to exit out from the trading long positions.

Prashanth Tapse, Senior VP (Research), Mehta Equities says, “Lacklustre trend prevailed through the session on weak global cues, as investors exercised caution and resorted to selective buying in frontline banking stocks after RBI as anticipated maintained steady interest rates.”

However, selling in IT stocks continued on concerns that cut in global IT spend would hurt earnings of domestic software companies. More clarity would emerge after next week’s TCS results.

Stock Picks

SJVN

CMP: 135.40 | Stoploss: 128.00 | Target: 155.00

The stock has given a good breakout above its recent anchor VWAP resistance mark of 130.80 and managed to close above the same. According to its daily charts, the overall chart structure now appears to be positive, with a strict stoploss set at the 128.00 mark for potential upside targets of 155 and beyond.

BAJEL Projects

CMP: 226.50 | Stoploss: 209.00 | Target: 250.00

The stock has experienced a significant breakout above its recent consolidation trendline resistance mark of 225.45 on the daily timeframe charts. With the overall chart structure being positive and the stock closing above the minor trendline resistance mark, we anticipate the stock reaching higher levels of 250 and beyond, with a strict stoploss to be maintained near the 209 mark.

(Source_Riyank Arora Technical Analyst at Mehta Equities)