Pullback Formation May Continue

Mumbai: After a long correction, the benchmark indices witnessed a pullback rally and BSE Sensex was up by 600 points. Among sectors, almost all the major sectoral indices were traded into the positive territory, but PSU Bank index outperformed, rallied nearly 4 per cent.

Technically, after early morning intraday correction market took the support near 79,400 and reversed. Post reversal it held the positive momentum throughout the day, which is largely positive.On the higher side, market could move up till 80,400-80,600. On the flip side, below 79,400 the sentiment could change. Below the same, traders may prefer to exit out from the trading long positions.

Shrikant Chouhan, head (equity research), Kotak Securities, said: “For the traders now, the 79,600-79,400 would act as a key support zones. As long as the market is trading above the same, the pullback formation is likely to continue.” Amid higher valuation concerns, markets had corrected sharply last week. Hence, the recovery was seen.

Prashanth Tapse, senior V-P (Research), Mehta Equities, says: “Also, short covering ahead of the monthly expiry this week triggered a rally in domestic markets, although the undertone remains cautious.”

This rally followed a five-day losing streak, largely driven by strong quarterly earnings from ICICI Bank and Bank of Baroda, which boosted investor sentiment.

Vaibhav Vidwani, research analyst, Bonanza said: “The current rally is encouraging, but ongoing foreign institutional selling and weaker corporate earnings could continue to pressure the market in the near term.”

STOCK PICKS

Cipla| TRADE-BUY | CMP : Rs1503.00 | SL : Rs1470.00 | TARGET : Rs1550.00

Cipla, currently trading at Rs1,503, is positioned in an uptrend with key support at Rs1,470, offering controlled downside risk. Technical indicators favour a continuation toward the target of Rs1,550, aligning with a positive price momentum. The stock’s favorable risk-reward profile makes it a strategic entry for risk-managed growth within a defined range.

Punjab National Bank (PNB) | TRADE-BUY | CMP : Rs98.64 | SL : Rs92 | TARGET : Rs105

PNB, at Rs98.64, presents a compelling entry with a defined stop loss at Rs92, underscoring controlled risk exposure. The technical setup signals potential movement toward Rs105, backed by recent volume and momentum indicators. This risk-reward structure is strategically aligned with current market dynamics, suggesting a favourable growth outlook.

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