Sensex May Weaken Further

Mumbai: The Benchmark indices witnessed a sharp correction, with the Nifty ending nearly 3 per cent lower while Sensex was down over 2000 points. Among sectors, all the major sectoral indices registered profit booking at higher levels, with the Capital Market and IT indices correcting sharply.

The Capital Market index was down by 9.28 per cent, while IT index declined by 7.90 per cent. During the week, the market slipped below 22,500/74500, and post-breakdown selling pressure intensified. Technically, it has formed a bearish candle on weekly charts and is holding a lower top formation on daily and intraday charts, which is largely negative.

Amol Athawale of Kotak Securities, said: “We view the current market condition as weak but oversold, hence the strong possibility of a pullback rally from the current levels is not ruled out.”

For short-term traders, 73500 would be the key level to watch out. Below this, the market could slip to 73000-72500. On the flip side, if the index sustain above 73,500, sentiment could change.

STOCK PICKS

Hindalco | TRADE-BUY | CMP: Rs634 | SL: Rs615 | TARGETs: Rs660 and Rs680

Hindalco has shown strength after bouncing from its support zone near 630, confirming a bullish outlook. The stock is forming a higher low pattern, indicating a potential uptrend. With RSI (14) at 58, suggesting improving momentum, a stop-loss can be placed at 615 with potential upside targets of 660 and 680.

IndusInd Bank | TRADE-SELL | CMP: Rs990.10 | SL: Rs1040 | TARGETs: Rs930 and Rs920

IndusInd Bank is showing signs of weakness after facing resistance near 1020. The stock is forming a lower high pattern, signaling further downside. With RSI (14) at 42, indicating bearish momentum, a stop-loss can be placed at 1040, with potential downside targets of 930 and 920.

(Source-Mehta Securities)

Prashanth Tapse, Senior VP-Research, Mehta Equities, said: “Domestic investors went into a panic mode and offloaded equities at will, as weak global market cues sparked a major selloff causing benchmark indices to crash nearly 2 per cent.”

There is a lot of discomfort amongst the investors over Trump announcing imposition of import levies on several nations. Also concerns over slowing economic growth, earnings coming in below expectations, and lingering foreign investor selling have been driving bearish trends at regular intervals.