55,100 to act as an immediate support
The Indian benchmarks made gap-down opening on Monday and continued their selling pressure amid rising Omicron coronavirus cases worldwide.
image for illustrative purpose
Stock Picks
- MINDAIND: Above Rs1,045 with a target of Rs1,055 and Stop loss of Rs1,035. The stock is in upward trending channel and has given the breakout.
- TORNTPHARM: Above Rs3,062 with a target of Rs3,092 and Stop loss of Rs3,032. It has support of 8 and 40 EMA.
- MAXHEALTH: Above Rs389 with a target of Rs392 and Stop loss of Rs386. The stock is in upward trending channel and is on the verge of a breakout.
- KPRMILL: Above Rs588 with a target of Rs593 and Stop loss of Rs583. It has a support of 8 EMA.
- PRAJIND: Above Rs309 with a target of Rs312 and Stop loss of Rs306. It has reversed from the support of 8 EMA.
(Source-CapitalVia)
Mumbai: The Indian benchmarks made gap-down opening on Monday and continued their selling pressure amid rising Omicron coronavirus cases worldwide. Traders will be cautious with continuous net outflow of foreign funds as foreign portfolio investors (FPIs) pulled out Rs17,696 crore from the Indian markets in December month so far.
RBI data showed decline in India's forex reserves for the third consecutive week. Indian Shares slumped as raging global Omicron infections threatened to derail economic recovery, while Future Group stocks jumped after the country's antitrust agency suspended a deal with Amazon. Market participants showed concerned as rating agency ICRA has said the growth momentum lost in November 2021 on back of demand and supply chain disruptions in parts of south India on account of untimely rainfall.
The benchmark indices corrected sharply, the selloff was sharp and almost all the major sectoral indices registered profit booking at higher levels. But Reality and PSU Banks lost the most shed over 5 per cent, the Sensex fell 1878 points from the yesterday closing level.
Technically, the short-term structure of the market is still in to the weak side, but due to oversold situation strong possibility of meaningful pullback rally is not ruled out.
"We are of the view that, Monday's intraday low or 55,100 would act as an immediate support for the market. Above the same, pullback rally will continue till 56,100-56,300," says Shrikant Chauhan, head of equity research (Retail), Kotak Securities.
On the flip side, dismissal of 55,100 could possibly open another correction wave up to 54,900-54,600. The texture of the market is volatile hence level-based trading with strict stop losses would be the ideal strategy for the day traders, he added.
"We witnessed the continuation of correction in the market as BSE Sensex 30 Index and an attempt to hold a crucial level of 55,000. Our research suggests that 55,000 is an important psychological support level for BSE Sensex. If the market is unable to sustain the level of 55,000 as well, we might see the correction in the market to continue further till the level of 54,200. We advise the traders to refrain from building a fresh buying position, until we see improvement in the market conditions. Technical Indicators suggest a volatile movement in the market," another analyst said
