Time for level-based trading

Mumbai: On Monday, the benchmark indices witnessed lacklustre activity, with BSE Sensex was up by 148 points. Among sectors, some buying was seen in media and selective stocks, whereas metal and realty indices corrected sharply, trimmed over one per cent.

Technically, after a muted open, the market registered range-bound activity throughout the day. Additionally, on daily charts, it has formed a small candle, and on intraday charts, it is witnessing non-directional activity.

Shrikant Chouhan, head (equity research), Kotak Securities, said: “We are of the view that current market texture as non-directional, perhaps as traders are waiting for a breakout on either side.”

On the higher side, the 74,800 would be the immediate breakout level for the bulls. Above this level, the market could move up to 75,000-75,350. Conversely, below 74,500, selling pressure is likely to accelerate. Below the same, the market could slip to 74,200-74,000.

Given the non-directional texture of the current market, level-based trading would be the ideal strategy for day traders.

Stock Picks

Tata Chemicals| TRADE-SELL | CMP: Rs827 | SL: Rs860 | TARGETs: Rs790 and Rs780

Tata Chemicals has witnessed a breakdown below its crucial support of Rs830, confirming a bearish outlook. The stock is forming a lower high and lower low pattern, signalling further weakness. With RSI (14) at 28, indicating oversold conditions but still weak momentum, a stop-loss can be placed at Rs860, with potential downside targets of Rs790 and Rs780.

JSW Steel| TRADE-SELL | CMP: Rs958 | SL: Rs990 | TARGETs: Rs900 and Rs880

JSW Steel has faced strong resistance near Rs970 and is showing signs of weakness. The stock has broken below its short-term support levels and selling pressure has increased. With RSI (14) at 35, suggesting continued bearish momentum, a stop-loss can be placed at Rs990, with potential downside targets of Rs900 and Rs880.

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