Traders Awaiting A Breakout In Either Direction

Mumbai: In the last session of the week, the benchmark indices witnessed a range-bound activity. After a roller-coaster week, BSE Sensex was down by 500 points. Among sectors, IT and Capital Market indices lost the most, shedding over four per cent, while some buying was seen in selective financial and pharma stocks.

Technically, the market is exhibiting non-directional activity; on the lower side, it is consistently finding support near 73,300, while profit booking has been witnessed between 74,700 and 74,900. We believe that the current market texture is non-directional, and traders may be awaiting a breakout in either direction. For the bulls, the key breakout zone is at 74,900. A dismissal of the 74,900 breakout could push the market towards 75,500-75,800. Conversely, if the market falls below 73,300, selling pressure is likely to accelerate. Below this level, the market could retest levels of 72,700-72,400.

For the Bank Nifty, a Double Bottom support is placed at 47,700. As long as it is trading above this level, a pullback formation is likely to continue. On the higher side, it could move up to the 20-day Simple Moving Average (SMA), or 48,600 and 48,800. However, if it falls below 47,700 level, the sentiment could change, increasing the likelihood of hitting 47,300-47,000.

Amol Athawale of Kotak Securities, said: “For day traders, the 74,300 would be the key level to watch. As long as the market is trading below this level, the weak sentiment is likely to continue.”

Prashanth Tapse, senior V-P (research), Mehta Equities, said: “The moderating inflation and uptick in GDP numbers failed to cheer investors, as markets ended weak in late selling pressure with mixed European and Asian cues coupled with FII selling dominating the mood.”

Investors are nervous about the likely imposition of tariffs on Indian goods by the Trump administration and its overall impact going ahead, hence caution with a negative bias could prevail for some more time.

Vaibhav Vidwani, research analyst at Bonanza, said: “Indian stock market concluded the trading session on March 13, with mixed sentiments. BSE Sensex closed on negative note down by 200 points at 73,828. The IT sector continued to face pressure, contributing to the overall decline, while banking sectors showed resilience.”

Foreign portfolio investors (FPIs) maintained a cautious stance, while domestic institutional investors (DIIs) remain optimistic. Overall, the market remains cautious ahead of the Holi holiday, when trading will be suspended across all segments.

STOCK PICKS

Infosys| TRADE-SELL | CMP: Rs1,579 | SL: Rs1,605 | TARGET: Rs1,540

Infosys is facing resistance near recent highs, indicating potential downside pressure. The stock has failed to sustain above key levels, suggesting weakness in momentum. A breakdown below Rs1,570 could accelerate selling, pushing it towards Rs1,540 levels. With signs of distribution in IT stocks, Infosys may see further downside. A strict stop loss at Rs1,605 should be maintained to limit risk.

Larsen & Toubro (L&T)| TRADE-BUY | CMP: Rs3,187 | SL: Rs3,150 | TARGET: Rs3,250

L&T has rebounded from key support levels, indicating strong accumulation. The stock is showing resilience despite market volatility, suggesting further upside. A breakout above Rs3,200 could trigger fresh buying, leading it towards Rs3,250 levels. With the infrastructure sector remaining strong, L&T is likely to gain momentum. A strict stop loss at Rs3,150 should be followed to manage risk.

(Source: Mehta Securities)