Sensex Forms A Long Bullish Candle

Mumbai: On Thursday, the benchmark indices bounced back sharply, with BSE Sensex gained by 1,436 points. Among sectors, almost all the major sectoral indices traded in positive territory, but the Auto index outperformed, rallying by 3.75 per cent.

Technically, the market successfully cleared the 200-day SMA (Simple Moving Average) resistance mark, and after this breakout, positive momentum intensified. On daily charts, it has formed a long bullish candle, which supports further uptrend from the current levels.

Shrikant Chouhan, head (equity research), Kotak Securities, said: “We believe the current market sentiment has shifted from bearish to bullish, and the levels of 79,400 and 79,700 would act as strong support zones for short-term traders.” On the upside, the range of 80,300 to 80,500 could serve as crucial resistance areas for short-term traders.

The current market texture is bullish and for the day traders buying on intraday corrections and selling on rallies would be the ideal strategy. However, if the index falls below 79,400, the uptrend would become vulnerable.On the other hand, if it falls below 78,000, the uptrend would be vulnerable. Below this point, traders may prefer to exit their long position.

Prashanth Tapse, senior V-P (research), Mehta Equities, said: “While markets failed to deliver a Christmas rally over the past few weeks, the New Year has provided strong optimism in the first two days with Sensex touching the psychological 80k mark on the back of broad-based short covering.”

Gains in banking, IT, auto and metals triggered a major rally despite concerns in the currency market which saw the rupee scaling fresh lows amid rising crude oil prices and subdued growth. However, any further uptick in US bond yields could weigh on domestic equities and fuel foreign fund outflows. The Indian stock market closed on a positive note today, continuing the New Year rally. The BSE Sensex surged by 1,436 points, or 1.83 per cent, to close at 79943.

Vaibhav Vidwani, research analyst, Bonanza, said that the rally was driven primarily by gains in the financial services and IT sectors, with notable performances from Bajaj Finance and Kotak Mahindra Bank. Conversely, auto stocks experienced a slowdown after significant gains earlier in the week.

STOCK PICKS

Ultra Tech Cement| TRADE-BUY |CMP: Rs11,472 | SL: Rs11,000 | TARGET: 12,000

The stock has rebounded from its Anchor VWAP support zone near Rs11,400, aligning with a key horizontal support level. A breakout above the descending trendline resistance confirms renewed bullish momentum. The ongoing uptrend, reinforced by strong volume inflow, suggests further upside potential. Positive sentiment from favourable news flow supports the likelihood of achieving the projected targets.

IGIL| TRADE-BUY |CMP: Rs483 | SL: Rs465 | TARGET: Rs525 and Rs550

The stock has established a solid base near the Anchor VWAP support zone at Rs480, holding above the 20-day moving average. A breach of Rs490, the immediate resistance, would signal a continuation of the bullish trajectory. The upward-sloping trendline from recent lows reinforces the stock’s positive structure. With a tight stop loss, the trade offers an excellent risk-reward ratio for a move toward higher levels.

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