Investors book profits at regular intervals

Mumbai: On the last day of the week, benchmark indices witnessed a volatile trading session, after a roller coaster activity the Sensex closed at 73,878. Among Sectors, Media and IT indices lost the most. Media down 3.1, IT Index down 2.25 percent whereas Financial and PSU Banks indices gained over 2 per cent.The benchmark index on last Friday corrected sharply due profit booking on higher levels market.

Technically, on daily charts, the index has formed double top formation and on weekly charts, it has formed Doji candlestick formation, which indicates strong possibility of further weakness. “For the positional traders now, 20 day SMA (Simple Moving Average) or 73,850 would act as a sacrosanct support zone The selling pressure is likely to accelerate if the market slip below 73,850,” says Amol Athawale, VP-technical Research, Kotak Securities.

Below 73,850, the market could retest the level of 73,500. Further down side may also continue which could drag the index till 73,200. On the other side, above 74,000 the market could bounce back till 74300-74450. Markets failed to capitalise on its firm start despite upbeat US and European cues and crashed on the back of broad-based selling, as investors worried over premium valuations of local stocks offloaded their holdings. Weakness in banking, telecom, oil & gas and realty stocks led the slump, even as Dow Futures indicated an upbeat start. As valuation discomfort rises, investors are becoming chosy and taking select bets.

“ Uncertainty over interest rate, gloomy geo-political scenario and FII fund outflows have prompted investors to book profits at regular intervals,” says Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

STOCK PRICES

Jubilant Foodworks (Buy)

CMP: 462.75 | SL: 450.00 | Target: 510.00

The stock has given a good re-test to the breakout mark followed by a good buying pick-up seen in Friday’s session. With the overall trend being positive and momentum being strong, along with a good pickup in volumes, the stock is expected to head higher, and we might see targets of 510 and above coming in on the stock. A set stop loss can be kept at the 450 mark for Jubilant Foodworks to manage risk well from current levels.

Tata Consumer (Buy)

CMP: 1095.00 | SL: 1070.00 | Target: 1180.00

The stock is consolidating well between its anchor VWAP resistance and support mark of 1115 and 1075. With the stock moving nicely within the range, it is expected that we might see a good breakout on the upside owing to the initial base macro trend being positive on the counter. The major support of 1075 should be held strongly, and we might see higher targets of 1180 and above coming in a few days on the stock. A strict stop loss should be kept at the 1070 mark to manage risk well.

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

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