Short-Term Texture Remains On Weak Side

Mumbai: On Tuesday, the benchmark indices witnessed a narrow range activity, with the Sensex down by 29 points. Among sectors, the IT index gained nearly 1 per cent, while the defence index was the top loser, shedding over 3 per cent.

Technically, after an early morning intraday correction, the market took support near 75,500 and recovered. However, the short-term texture of the market remains on the weak side. On the other side, below 75,500, the sentiment could change. Below this zone, it could retest the level of 75,200-75,000.

Prashanth Tapse, Senior VP-Research, Mehta Equities, said: “Markets ended a tad lower in a sluggish trading session as caution prevailed amongst the investors amid rising foreign fund outflows and falling rupee. Gains in IT, power, oil & gas, and metal stocks helped the market almost erase all its losses.” However, expensive valuation concerns and dismal earnings season continued to plunder small cap stocks.

Vaibhav Vidwani, Research Analyst, Bonanza, said: “The Indian stock market witnessed a volatile session today, ultimately closing on a mixed note.” The Sensex edged down 0.04 per cent to settle at 75,967. Consumer stocks are offset by gains in IT. Concerns about global trade, foreign outflows, and poor results continued to raise caution. Concerns over value caused small-caps and midcaps to decline

Stock Picks

Trent |TRADE-BUY | CMP: Rs4,997 | SL: Rs4,900 | TARGET: Rs5,200

The stock has touched major support mark of 4955 on its technical charts and seeing good signs of reversal from lower levels. With the overall chart structure of the stock being positive and stock entering oversold territory, it appears that the stock should head higher towards 5200 and above odd targets. A strict stoploss should be kept at 4900 mark to manage risk well.

Indusind Bank | TRADE-BUY | CMP: Rs1,024 | SL: Rs1,000 | TARGET: Rs1,100

The stock has touched major anchor vwap support mark of 1020 on its daily time frame charts and indicating good signs of reversal and strength. With banking stocks having good technically structure majorly, it appears the stock should head higher towards 1100 and above targets. A strict stoploss should however be kept at 1000 level to manage risk well.

(Source: Riyank Arora, technical analyst at Mehta Equities)