Sensex in Double Bottom formation
As long as the benchmark index is holding 64,850 level, bullish sentiment is likely to continue, above which, it could rally till 65,500-65,600; On the flip side, below 64,850pts, uptrend would be vulnerable
image for illustrative purpose
MUMBAI On Monday, the benchmark indices bounced back sharply, where the 30-share benchmark index BSE Sensex was up by 267 points. Among sectors, Metal and IT indices gained over 1 per cent, whereas PSU Banks and Media stocks witnessed intraday selling pressure at higher levels.
Technically, after a muted opening one more time, the index took the support near 50-day SMA (Simple Moving Average) or 64,850 points and reversed. On daily charts, the index has formed bullish candle and on intraday charts, it has formed double bottom formation.
“We are of the view that, as long as the index is holding 64,850 level, the bullish sentiment is likely to continue. Above which, the index could rally till 65,500-65,600,” says Shrikant Chauhan of Kotak Securities. On the flip side, below 64,850 points, the uptrend would be vulnerable. Below the same, the index could slip till 64,550-64,400.
Vinod Nair, Head of Research at Geojit Financial Services says, “A rebound in the global market after a significant correction prompted buying in domestic equities, particularly within the IT sector. However, the potential for volatility to linger in the near term remains due to the increasing dollar index and elevated US bond yields, fuelled by concerns about rate hikes. Investors are keenly observing the commentary from the Fed chair during its forthcoming summer conference for interest rate insights.”
Meanwhile, Asian markets displayed a mixed performance, reacting to the smaller-than-anticipated rate cut initiated by the Chinese central bank.
STOCK PICKS
1. GRASIM: BUY, CMP Rs1,807, Target Rs1,890, SL Rs1,770. The stock has given a breakout of the sloping channel pattern on the daily chart. Hence, the bullish momentum is likely to continue in the coming horizon.
2. LTIM: BUY, CMP 5,148, Target Rs5,400, SL Rs5,050. On the daily time frame, the counter has formed a Cup and Handle chart pattern and the structure indicates breakout from resistance zone in the near term for fresh up move.
3. TATASTEEL: BUY, CMP Rs116.80, Target Rs124, SL Rs113. The counter had witnessed price correction from the higher levels. However, it has formed a hammer candlestick pattern near its support zone, which signifies trend reversal.
(Source: Kotak Securities)
