Sensex holds lower top formation on charts
Fresh uptrend rally possible only after dismissal of 66,650 level, below which, it could slip till 66,100-66,000; On the other side, above 66,650pts, the index could rally till 66,900-67,000 levels
image for illustrative purpose
Mumbai On Monday, the benchmark indices continued the weak momentum, where as the 30-share benchmark index BSE Sensex was down by 299 points. Among sectors, most of the major sectoral indices witnessed selling pressure at higher levels, but FMCG index corrected the most, shed over 1.75 per cent.
Technically, after a muted opening, the index consistently facing selling pressure at higher levels. On intraday charts, the index held the lower top formation and on daily charts, it has formed small bearish candle, which is largely negative.
“We are of the views that, the index has completed a one leg of technical correction, but fresh uptrend rally possible only after dismissal of 66,650 levels. Below 66,650 points, the market could slip till 66,100-66,000 levels,” says Shrikant Chouhan of Kotak Securities. On the other side, above 66,650 points, the index could rally till 66,900-67,000 points.
Vinod Nair, Head of Research at Geojit Financial Services, says: “Volatility has re-emerged as initial Q1 results are below the expectations. Sector wise setbacks were experienced in IT and FMCG, unveiling weak demand and high input costs. Banks are mixed while pharma stocks are withholding the volatility in anticipation of a better demand from developed economies, reduction in US pricing issues and expansion in operating margins.”
Investors are also watchful of the upcoming FOMC meeting, addressing rate hike and quantitative tightening measures, which could have an implication on FIIs inflows.
STOCK PICKS
BANKBARODA: Buy, CMP Rs198.3, Target Rs210, SL Rs193. From the last few sessions, the counter is stuck into a rectangle formation and trading in a range-bound move. However, the price action suggests at a likely breakout from the consolidation for fresh up move.
GRASIM: Buy, CMP Rs1,819.05, Target Rs1,910, SL Rs1,780. The stock is into a rising channel forming a higher top and higher bottom series. Moreover, recent formation of a strong bullish candlestick pattern indicates an uptrend to continue in the near term.
HINDALCO: Buy, CMP Rs433.15, Target Rs455, SL Rs424. After witnessing some sell-off from higher levels, the stock is hovering near its retracement zone. The structure of the chart indicates a revival of uptrend in the stock from current levels.
(Source: Kotak Securities)
