Sensex forms long bullish reversal candle
Due to temporary oversold conditions, the market bounced back sharply
image for illustrative purpose
Mumbai: On Monday, the benchmark indices bounced back sharply as BSE Sensex was up by 721 points.
Among sectors, except Pharma all the major sectoral indices were traded in the green, but PSU Bank index outperformed, gained over 7.55 per cent.
Technically, due to temporary oversold conditions as the market bounced back sharply. It also formed long bullish reversal candle on daily charts and reclaimed 60,500 level, which is largely positive.
"We are of the view that, for day traders now 60,200 would be the immediate support zone. Above the same, the index could continue the pullback momentum till 60,800-61,000 or 50 day SMA," says Shrikant Chouhan, head (equity research-retail), Kotak Securities.
However, dismissal of 60,200 may accelerate the selling pressure, below 60,200, it could slip still 60,000-59,700.
Stock Picks
Axis Bank: Buy, CMP Rs929.2, Target Rs975, SL Rs910
After a strong uptrend rally, the stock witnessed price correction. However, after a quick correction the stock has rebounded and closed above its short term moving average indicating bullish continuation formation.
CHOLAFIN: Buy, CMP Rs712.7, Target Rs750, SL Rs696
Post short-term correction in the stock, a strong reversal formation from its multiple support zone indicates an uptrend from the current levels.
HARTIARTL: Buy, CMP Rs809.25, Target Rs850, SL Rs790
The stock is trading near its support zone. Hence, the structure is indicating reversal from current levels for a new leg of up move in the near term.
GRASIM: BUY, CMP 1726, TARGET 1810, SL 1690
The stock witnessed price correction from the higher levels and eventually, it has found support near its demand zone. The texture hints at a fresh leg of upward momentum to resume from the current levels.
BPCL: Buy, CMP Rs324.8, Target Rs340, SL Rs317
The stock had witnessed sharp sell off from the higher levels. However, it has formed an inverted hammer candlestick pattern near its support zone, which signifies trend reversal.
(Source-Kotak Securities)
