Pullback Formation Likely To Continue

Mumbai: On Wednesday, the benchmark indices witnessed a recovery from lower levels, with the Sensex was down by 51 points. Among sectors, the Oil and Gas index outperformed, gaining over 1.5 percent, whereas profit booking was observed in healthcare and pharma stocks. Technically, after an early morning intraday correction, the market found support near 77,500 and bounced back sharply, recovered over 600 points from its lowest level of the day.

Shrikant Chouhan, head (equity research), Kotak Securities, said: “We believe that as long as the market is trading above 77,500, the pullback formation is likely to continue. On the upside, it could bounce back to around 78,500. Further gains may occur, potentially lifting the index to the 200-day Simple Moving Average (SMA) or at 78,900.” However, below 77,500 sentiment could change below the same, traders may prefer to exit out from the trading long positions.

Prashanth Tapse, senior V-P (research), Mehta Equities, said: “There are already concerns that the forthcoming third quarter earnings could be muted for several sectors due to weak government spending and subdued demand, which is pushing investors, especially the FIIs, to further slash their domestic equity bets.”

Also, the focus will be on next month’s Union Budget announcement and what will be the government’s action plan to boost demand and measures to overcome global challenges.

Vaibhav Vidwani, research analyst, Bonanza, said: “Indian stock markets closed in red the BSE Sensex down by 50 points, settling at 78,148.This decline followed a day of positive trading as investors reacted to mixed cues from global markets, particularly after strong U.S. economic data raised concerns about the Federal Reserve’s future rate cuts.

“Sector-wise, oil & gas, IT, and FMCG stocks showed resilience, but overall market sentiment was weighed down by rising treasury yields and inflationary pressures. As the market gears up for upcoming earnings reports, cautious trading is expected amid forecasts of slowing economic growth in India for FY25, projected at 6.4 per cent.”

STOCK PICKS

Bajaj Finserv| TRADE-BUY: Rs1,704 | SL: Rs1,650 | TARGET: Rs1,750

Bajaj Finserv has broken out above Rs1,690 and is now eyeing its next resistance near Rs1,750. The stock has witnessed a strong pickup in volumes, signalling bullish momentum and a likely move higher. With an intact uptrend and positive sentiment, traders can aim for Rs1,750, while keeping a strict stop loss at Rs1,650 to manage risks.

Bajaj Finance| TRADE-BUY: Rs7,415 | SL: Rs7,350 | TARGET: Rs7,700

Bajaj Finance has broken out above Rs7,257, with its next resistance zone at Rs7,600-7,700. The stock is supported by robust volumes and a strong technical setup, pointing to sustained bullish momentum. Traders can look for a move toward Rs7,700, ensuring a stop loss at Rs7,350 to safeguard against any downside.

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