Sensex in promising reversal formation
As long as market is trading above 50-day SMA or 72,350pts, the positive momentum is likely to continue; Above the same, the market could rally till 73,100-73,500 level
image for illustrative purpose
Mumbai: In the last week, the benchmark indices witnessed volatile trading, after a roller-coaster trading, BSE Sensex was up by 188 points. Among sectors, Reality, Metal and Auto indices outperformed whereas IT index lost the most, shed over six per cent.
During the week, the market slipped below 50-day SMA (Simple Moving Average), but in last two days on the backdrop of strong global cues it bounced back sharply. Technically, the index has formed promising reversal formation and currently it is comfortably trading above 50-day SMA that is largely positive.
“For the traders now, as long as it is trading above 50-day SMA or 72,350 the positive momentum is likely to continue. Above the same, market could rally till 73,100-73,500,” says Shrikant Chouhan, head (equity research), Kotak Securities. On the flip side, below 72,350 sentiment could change. Below 72,350, the market could slip till 72,000-71,800. For Bank Nifty, 20-day SMA or47000 could be the immediate trigger level. Above 47,000, it could rally till 47,250-47,500. On the flip side, below 46,500 or 50 day SMA uptrend would be vulnerable.
Prashanth Tapse, senior VP (research), Mehta Equities, says: “Markets displayed volatility, but managed to end higher amid gains in realty, telecom and auto stocks whereas IT stocks faltered sharply after Accenture slashed its full-year revenue guidance which renewed concerns of the sector in an uncertain global environment.”
FIIs offloading shares of domestic equities coupled with a sharp fall in the currency level has been indicating that the road ahead for equity markets could be bumpy.
Stock Picks
Juniper Hotels Ltd
CMP: 505.45 | Stoploss: 470 | Target: 600
The stock has given a good breakout above its recent swing high mark of 503.70 and successfully managed to close above the same. With the base trend being positive and the stock witnessing a re-test of its breakout zone, the overall risk-reward is favorable on the buy side with a set stoploss at the 470 mark for potential targets of 600 and 625.
LTIMindtree Ltd
CMP: 5,005 | Stoploss: 4,900 | Target: 5,150 and 5,200
The stock has touched a major support mark of 5,000 on its daily and weekly charts. The base trend continues to remain positive despite the weak sentiment on IT Stocks in Friday’s session because of poor guidance from Accenture. Overall, a strict stoploss can be kept at the 4,900 mark, and we can see higher targets of 5,150 and 5,200 coming on the stock as it undergoes some short-covering move.
(Source_Riyank Arora Technical Analyst at Mehta Equities)
