Time For Level-Based Trading Amid Volatility

Mumbai: On Tuesday, the benchmark indices corrected sharply. NSE Nifty ends 320 points lower, while BSE Sensex fell by 1,235 points. Among sectors, all the major sectoral indices were traded in the red, but the Realty index lost the most, shed over four per cent.

Technically, after a gap-up open, the market consistently faced selling pressure at higher levels. This led to the formation of a long bearish candle on the daily charts, and the index closed below the 76,000-support zone, which is largely negative.

Shrikant Chouhan, head (equity research), Kotak Securities, said: “We are of the view that, as long as the market trades below 76,000, the weak sentiment is likely to continue. On the downside, the market could slip as low as 75,500.” Further weakness is likely to continue, which could drag the market till 75,300. However, above 76,000, the market could bounce back, moving towards 76,400-76,500. The current market texture is volatile, and thus level-based trading would be the ideal strategy for day traders.

Prashanth Tapse, senior V-P (research), Mehta Equities, said: “Markets were on a cautious mode in the past few sessions, but witnessed frenzied selling on Tuesday as investors now fear that Trump’s inaugural speech to safeguard America’s interest could hurt economic prospects of many countries, including India, going ahead.”

While foreign investors continue to offload domestic shares at will, any further rise in US bond yields could trigger massive selling.

STOCK PICKS

Oberoi Realty | TRADE–SELL | CMP: Rs1,850| SL: Rs1,900| TARGET: Rs1,750

Oberoi Realty has experienced a significant breakdown, falling below its critical support level of Rs1,884 and closing beneath it. The overall trend on the charts appears bearish, with increasing negative momentum. This indicates a likely move toward the target of Rs1,750 or lower. To effectively manage risk, it is recommended to place a stop-loss around Rs1,900.

Trent | TRADE- SELL |CMP: Rs5,724|SL: Rs5,850| TARGET: Rs5,600

Trent is showing signs of growing bearish momentum, with the RSI pointing toward weakening conditions. After breaking below Rs6,080, the stock has seen a notable increase in trading volumes, suggesting further downside potential. It is anticipated to reach Rs5,600 or lower levels. To minimize risk, maintaining a stop-loss at Rs5,850 is advised.

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