Short-term texture is bullish amid overbought conditions
Wait for a range-bound activity in near future; For now, 80,900-80,600 would act as a key support zones, above which it could trade till 81,600 and up to 82,200. On the flip side, below 80,600 the sentiment could change
image for illustrative purpose
Mumbai: In the last session of the week, benchmark indices bounced back sharply after promising uptrend rally. BSE Sensex was up by 728 points. Among sectors, Pharma and Healthcare indices outperformed, Pharma index rallied 6 per cent and Healthcare index was up by 5.90 percent, whereas Reality and Bank Nifty indices shed over 1.5 per cent.
During the week, the market slipped below 20-day SMA (Simple Moving Average), but eventually it took the support near 79,200 and reversed. Post reversal it registered stellar rally. Technically, long bullish candle on daily and weekly charts and uptrend continuation formation on intraday charts supports further uptrend from the current levels.
“We are of the view that, the short-term market texture is bullish, but due to temporary overbought conditions we could see range-bound activity in the near future,” says Amol Athwale, V-P (technical research), Kotak Securities.
For the trend following traders now, 80,900-80,600 would act as a key support zones. As long as the market is trading above the same, the bullish texture is likely to continue. On the higher side, 81,600 could be the immediate hurdle for the bulls. Further upside may also continue which could lift the market up to 82,200. On the flip side, below 80,600 the sentiment could change.
“Indian markets outperformed its global peers on the back of a strong across-the-board buying support after languishing in negative territory for the past five trading sessions. The sharp rebound signifies that India remains a good long-term bet and the economy continues to show strong resilience in spite of global uncertainty and geo-political tensions. Also, most of the blue chips and mid-cap companies have reported better earnings, which is providing a major impetus to markets,” says Prashanth Tapse, Senior VP (Research), Mehta Equities.
“On Friday, domestic market benchmark indices Nifty and Sensex closed on green note after falling for five consecutive sessions. This recovery was driven by value buying at lower prices and gains in major sectors like Metal, IT, Pharma and Infra is observed in Firday’s secession,” said Vaibhav Vidwani, research analyst, Bonanza Portfolio.
STOCK PICKS
Divis Lab | Buy | CMP: 4792.25 | Stop-Loss: 4,750 | Target: 4,900 and 5,000
Divis Lab has achieved a strong breakout above its 52-week high resistance mark of 4,660 and has successfully closed above this level. With volumes in Friday’s session nearly twice the 30-day average and an RSI (14) around 68.53 showing a positive uptrend, we anticipate potential targets of 4,900 and 5,000. A stop-loss should be set at 4,750 to manage risk effectively.
Tata Steel |Buy | CMP: 162.50 | Stop-Loss: 155 | Target: 172.50
Tata Steel has touched its trendline support mark of 156 on the daily time frame charts and is holding well above this level. With volumes in Friday’s session nearly 1.5 times the 30-day average and an RSI (14) around 41.14, the stock is expected to gain momentum in the coming days. We anticipate potential targets of 172.50 and above. A stop-loss should be set at 155 to manage risk effectively.
(Source: Riyank Arora, technical analyst at Mehta Equities)
CMP (Current Market Price); SL (Stop Loss)/All prices in Rs
