Sensex to continue pullback rally

Mumbai: On Wednesday, the benchmark indices witnessed a narrow range activity. The Sensex gained 54 points. Among Sectors, strong buying was seen in Media and Reality stocks whereas profit booking continued in IT stocks. Technically, post sharp reversal formation, the index is witnessing range bound activity.

"On intraday charts, the index has formed higher bottom formation which supports continuation of pullback rally in the near future," says Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities. For the traders once again 58,800 would be the sacrosanct support zone. Above which, the index could rally till 59,400-59,500. On the flip side, the bullish sentiment could change, if the index succeeds to trade below 58,800. Below which the index could retest 58,500-58,400 level.

Stock Picks

CUMMINDIND: Stock has outperformed market in recent time from the lows of June but trend line has been breached down last week and today we got third closing below the line confirming trend reversal. Secondly, price has shown Negative divergence with RSI and MACD. September future of CUMMINDIND can be short positional for tgts of 1140/1080 with Stop loss at 5 day average which is at 1255

AXISBANK: Banking stocks were on dream run since last two months but now dream has came to an end. Axisbank has also shown signs of weakness in last three sessions too. Stock has successfully closed below 5-10 day average today showing sign of reversal and weakness. Also indicators have given crossover negatively over their averages. Stock can be short positionally for September for tgts of 731/718 SL: 766

(Source: Kush Ghodasara)