Sensex in reversal formation
The index could find the resistance near 73,100 -73,500; However, below 72,500pts, the market could retest the level of 72,000-71,900
image for illustrative purpose
Mumbai: As anticipated, markets were extremely volatile and gyrated nearly 1,000 points before ending with modest gains on selective buying in banking, IT, capital goods and realty shares. Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said: “While mixed global cues hardly enthused local investors, concerns over strong FII selling in the month so far along with caution in the poll season kept the upside limited with investors also trading with caution ahead of the inflation announcement.”
On Monday, the benchmark indices witnessed a volatile trading session, after a roller-coaster activity as BSE Sensex was up by 112 points.
Among sectors, Auto and PSU Bank indices lost the most, shed over one percent whereas Pharma index outperformed gained 1.80 per cent.
Technically, after early morning selloff the market took the support near 71,900 and reversed sharply. From the day lowest point the benchmark, indices bounced back over 959 points.
“We are of the view that, on intraday charts, the index has formed reversal formation and as long as the index is trading above 72,500 points, the pullback formation is likely to continue in the near future,” says Shrikant Chouhan, head (equity research), Kotak Securities.
On the higher side, the index could find the resistance near 73,100 and 50-day SMA (Simple Moving Average) or 73,500. However, below 72,500 the sentiment could change. Below 72,500pts, the market could retest the level of 72,000-71,900.
STOCK PICKS
BPCL
CMP : 606.90 | SL : 590 | TARGET : 650
A Bullish Harami candlestick pattern has appeared on BPCL’s daily timeframe charts. Trading volumes are approximately 1.5 times higher than the average over the past 30 days, and the RSI (14) is hovering around 51 with a slight uptick. This indicates a potential upward movement in the stock, possibly reaching and surpassing the target of 650. It’s recommended to maintain a stop loss at 590 to effectively manage risk when trading BPCL.
NMDC
CMP : 255.75 | SL : 244 | TARGET : 272
On its daily timeframe charts, NMDC has retraced to its breakout level of 252 and formed a bullish Doji candlestick at the support level. Given the favorable sentiment surrounding metal stocks and the limited downside risk at present levels, there’s an expectation for NMDC to move upward towards potential targets of 272 and higher. It’s advisable to establish a stop loss at 244 for NMDC.
(Source: Riyank Arora, technical analyst at Mehta Equities)
CMP (Current Market Price); SL (Stop Loss)/ All prices in Rs
