Short-term market texture still on a weak note
As long as the market is trading below 74,400 level, the chances of hitting 73,500-73,350 would turn bright; On the flip side, above 74,400 market could bounce back till 74,700-74,800
image for illustrative purpose
On Monday, the benchmark indices witnessed a lacklustre activity as BSE Sensex was up by 17 points. Among sectors, PSU Bank index lost the most, shed 3.7 percent whereas Reality index outperformed gained over 2.5 per cent. Technically, after a gap-up opening, the benchmark indices witnessed a profit booking at higher levels. On daily charts, the index has formed bearish candle and on intraday charts, it is holding lower top formation, which is largely negative.
“We are of the view that the short-term market texture is still on the weak side and for the traders now, the 74,400 would act as a trend decider level,” says Shrikant Chouhan, Head Equity Research, Kotak Securities.As long as market is trading below the same, the chances of hitting 73,500-73,350 would turn bright. On the flip side, above 74,400 the sentiment could change. Above 74,400, the market could bounce back till 74,700-74,800.
Markets ended mixed as selective buying in banking, IT, realty and auto stocks helped Sensex end marginally higher, but erased majority of its gains owing to steep fall in oil & gas, power, consumer durable and capital goods stocks.
“Investors are most likely to trade with caution with select longish bets amid growing uncertainty over the delay in rate cuts and persisting higher inflation,” says Prashanth Tapse, senior V-P (research), Mehta Equities Ltd.
STOCK PICKS
Godrej Properties | Buy
CMP: 2,842.75 | SL: 2,750 | Target: 3,000
The stock has given a strong breakout above its all-time high mark of 2,791.80 on its daily timeframe charts. With the RSI (14) around 69 and witnessing a minor uptick, it appears that the overall momentum is strong, and the stock should head higher towards potential targets of 3,000 and above, with a set stop loss at the 2,750 mark.
Jubilant Foodworks | Buy
CMP: 472.65 | SL: 450 | Target: 520
The stock has given a strong breakout above its trendline resistance mark of 455 and the swing high resistance mark of 469.85 on its daily timeframe charts. With the stock witnessing a closing near 473, it appears that the stock should eventually head higher towards potential targets of 520 and above, with a set stop loss at 450.
(Source: Riyank Arora, technical analyst at Mehta Equities)
CMP (Current Market Price); SL (Stop Loss)/ All prices in Rs
