Sensex forms bullish candle
Charts indicating higher bottom formation; For now, 50-day SMA or 73500 would act as key resistance areas, above 73,500 markets could touch upto 73800-74000, on the flip side, fresh selloff possible after dismissal of 72,800
image for illustrative purpose
Market is playing a wait and watch game as the polling season is underway and it’s difficult to predict that a 3-day rally would sustain going ahead, but Sensex closing above the crucial 73k mark holds the key.
Prashanth Tapse, Senior VP (research), Mehta Equities Ltd, said: “Surprisingly, investors continue to find value in mid- & small-cap stocks at a time when investors usually keep a low profile during the election season.”
The benchmark indices continued positive momentum second day in a row higher, while BSE Sensex was up by 328 points.
Among sectors, Metal index outperformed rallied 2.70 per cent whereas despite strong momentum Healthcare stocks witnessed intraday profit booking at higher levels. Technically, after a muted opening the market held the positive momentum throughput the day.
On daily charts, it has formed bullish candle and on intraday charts, it is holding higher bottom formation, which is largely positive. Shrikant Chouhan, head (equity research), Kotak Securities, said: “We are of the view that, the index has completed one leg of pullback rally and now 50-day SMA or 73,500 would act as key resistance areas for the bulls.”
Chouhan also added that “for traders, above 73,500 the next hurdle would be 73,800-74,000.”
On the flip side, fresh selloff possible only after dismissal of 72,800 level, below which the index could retest the level of 72,600-72,400.
STOCK PICKS
HAL
CMP: 4,074.70 | SL: 4,000 | TARGET: 4,250
The stock has given a strong breakout above its all-time high mark of 4,044.75 and successfully managed to close above the same. With volumes being nearly 2 times its Avg (30) days volume and RSI around 68, the stock is looking like a good buy with a strict SL of 4000 for potential upside targets of 4250 and above. Strong technical structure with low risk makes HAL an attractive buy at current levels.
M&M
CMP: 2,269.90 | SL: 2,230 | TARGET: 2,350
The stock has made a strong bullish candlestick on its daily timeframe charts, pushing the stock to close above its all-time high mark of 22,56.75. With the overall structure being positive and the stock trading well above its important moving averages, it appears that the stock should head towards 2,350 and above. A strict stop loss should be kept at 2,230 to manage risk well.
(Source: Riyank Arora, technical analyst at Mehta Equities)
CMP (Current Market Price); SL (Stop Loss)/ All prices in Rs
