Pullback formation is likely to continue
72,500 would be the crucial support level, above which, the nifty could continue the pullback formation till 73,400-73,500. On the flip side, below 72,500 the selling pressure is likely to accelerate
image for illustrative purpose
Mumbai: On Thursday, the benchmark indices witnessed pullback rally, the Sensex was up by 314 points. Among Sectors, Media, Digital, Oil and Gas, Metal stocks registered intraday buying interest whereas Banking and Financial stocks witnessed intraday selling pressure at higher levels. Technically, after muted opening the market bounce back sharply but it failed to close above 20-day SMA (Simple Moving Average) resistance level. “We are of the view that, the short-term market texture is still in to the weak side but intraday texture suggesting pullback formation is likely continue in the near future,” says Shrikant Chouhan, Head Equity Research, Kotak Securities.
For day traders now, 72,500 would be the crucial support level, above which, the nifty could continue the pullback formation till 73,400-73,500. On the flip side, below 72,500 the selling pressure is likely to accelerate. Below 72,500, the market could slip till 72,200-72,000. The intraday market texture is volatile hence; level based trading would be the ideal strategy for the day traders.
Prashanth Tapse, Senior VP (Research), Mehta Equities says, “Short covering provided the much-needed fillip after Wednesday’s crash, as key indices rose sharply after early weakness but quickly rebounded thereafter. Sharp gains in the US Dow Futures indicating a positive start also buoyed the local market sentiment.”
Recovery in mid & small-cap stocks shows that money is waiting on the sidelines to enter the market post healthy correction.
Stock Picks
HDFC BANK
Buy | CMP: 1459.70 / SL 1440 / Target 1500
Despite a weak market sentiment, Hdfc Bank held its mark and signalled good signs of strength and momentum. With a strict stoploss of 1440, the counter looks like a good buy for potential targets of 1500 and above.
SHRIRAM PISTONS
CMP: 1424.00 / SL 1350.00 / Target 1600 and 1700
After a good correction in small and midcap stocks, Shriram Pistons is seem to be retesting its breakout level on the monthly charts. With overall trend still being positive on long term charts, the stock is looking poised for a good upmove towards 1600 and 1700 with a strict SL placed at 1350 mark.
(Source_Riyank Arora Technical Analyst at Mehta Equities)
