Charts indicate further uptrend

Markets ended flat in a sluggish trading session as investors preferred to stay on the sidelines due to weak global cues. “As it was the last trading day of the week, investors didn’t want to increase exposure to equities and rather followed global cues,” Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

On the last trading day of week, the benchmark indices registered a fresh all time high of 75636.50. After a stellar rally, the Sensex was up over 3500 points. Among Sectors, almost all the major sectoral indices witnessed buying interest at lower levels but Metal and Media indices outperformed, rallied over 3 percent.

Technically, on weekly charts, the index has formed long bullish candle and it also formed breakout formation on daily charts which supports further uptrend from the current levels. “We are of the view that, the larger texture of the market is bullish but due temporary overbought conditions we could see range bound activity in the near future For the traders now buying on dips and sell on rallies would be the ideal strategy,” says Amol Athawale, VP-Technical Research, Kotak Securities.

In the near future 75,000 and 74,700 would be the key support zones while 75700-76000 could be the key resistance areas for the bulls.

STOCK PICKS

PFC

CMP: 491.65 / SL 485.00 / Target : 510.00

The stock has given a good breakout above its swing high resistance mark of 485.50 and successfully managed to close above the same. With the RSI on daily charts being 68, it indicates that the overall momentum is strong and stock should head towards potential targets of 510 and above. A strict stoploss should however be kept at 485 to manage risk well.

Imagicaa

CMP: 82.95 / SL : 75.00 / Target : 90.00

The stock has given a falling wedge breakout pattern on its daily time frame for charts. With RSI (14) seeing that minor uptick on daily charts and stock actually witnessing a sharp rise in volumes - the stock should head towards 90 and above. A strict SL should be kept at. 75 mark to manage risk well.

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

CMP (Current Market Price); SL (Stop Loss)/All prices in Rs