Bulls take control, but caution at 53,200 resistance level

Mumbai: Key benchark indices witnessed volatile trading sessions near 53,100 resistance level. On Tuesday, after the muted opening, the index quickly surpassed 52,900 resistance level, but once again it failed to sustain above 53,100 points and due to constant profit booking at higher level, it erased all intraday gains in the second half of the day and after a highly volatile trading session finally closed at 52,861 points.

On the domestic front, the Bank Nifty and Financial index outperformed and rallied over 1.25 per cent. However, profit booking was seen in auto and IT stocks. We are of the view that bulls are still in total control, but intraday chart indicates that traders may prefer caution near 53,200 resistance level. Technically, the short-term structure of the market is still bullish. However, on a daily chart, the Sensex has formed a Gravestone Doji candlestick kind of pattern, which indicates short-term weakness. In the near future, 52,900 should be the key level to watch out, below the same correction wave is likely to continue up to 52,850-52,500 levels. "On the flip side, if the market succeeds to trade above 52,900, we can expect continuation of the uptrend wave till 53,200-53,400 levels," says Shrikant Chouhan, EVP (equity technical research), Kotak Securities.

Stock Picks

-DMART: Above Rs3,425 with a target of Rs3,470 and Stop loss of Rs3,400. It is trading in a Strong uptrend and is on the verge of a breakout.

-HDFCBK: Above Rs1,540 with a target of Rs1,560 and Stop loss of Rs1,520. It has support of 8 and 40 EMA.

-BAJAJHLDING: Above Rs3,900 with a target of Rs3,970 and Stop loss of Rs3,850. The stock is in upward trending channel and is on the verge of a breakout.

- LINDEINDIA: Above Rs1,770 with a target of Rs1,830 and Stop loss of Rs1,715. It has a support of 8 EMA.

- TITAN: Above Rs1,775 with a target of Rs1,805 and Stop loss of Rs1,745. It has reversed from the support of 8 EMA.

(Source-CapitalVia)