Stretched valuations may lead to profit taking

Mumbai: Domestic market closed on a sideways note where Sensex closed at 81,785 points up by 0.09 per cent. The overall market was supported by IT and Pharma stocks on Wednesday.

“Improvement in international market sentiment led by expectation of a US rate cut in September brought optimism in IT stocks”, said Vaibhav Vidwani, research analyst, Bonanza Portfolio. After a volatile start, markets moved in a range and finally ended a tad higher as investors stayed cautious ahead of Thursday’s F&O expiry. Benchmark indices have already rallied for seven straight sessions and stretched valuations may lead to profit taking in the near term,” says Prashanth Tapse, senior V-P (research), Mehta Equities.

STOCK PICKS

Grasim | Buy: Rs2,704 | SL: Rs2,625 | Target: Rs2,800 - Rs2,825 Grasim is showing encouraging momentum, supported by a recent rise in volumes, with an RSI (14) of 53, suggesting a steady upward movement. The stock is approaching its AVWAP support zone, making it well-positioned for an upward movement towards the targets of Rs 2800.00 and Rs 2825.00. It is advisable to consider entry around Rs 2675.00, with a strict stop loss at Rs 2625.00 to safeguard against potential downside, ensuring a balanced approach to capitalize on the anticipated gains.

Dixon Tech | Buy: Rs13,270 | SL: Rs12,750 | Target: Rs14,000

Dixon Tech has recently broken out above the Rs 12,879 mark, with an RSI (14) near 67, reflecting strong momentum. The stock is currently experiencing a pullback towards its support zone, presenting a promising buying opportunity. It is advisable to buy on declines, with a strict stop loss at Rs 12,750.00 to manage risk, aiming for a target of Rs 14,000.00.

(Source_Riyank Arora Technical Analyst at Mehta Equities)