59,000 will act as key resistance level
On the short-term time frame, Sensex consistently forming Higher High and Higher Low formation, which is broadly positive
image for illustrative purpose
Mumbai: Profit booking continued second day in a row, BSE Sensex on Monday was down by 872 points. Among sectors, all the major sectoral indices were traded in the red but Metal and Reality lost the most. Metal down over 3 per cent while Reality shed 2.5 per cent. Technically, in last two days the index corrected nearly 1700 points. Due to weak market sentiments, the index consistently facing selling pressure at higher levels.
A sharp intraday sell off and bearish candle on daily charts indicating a continuation of weakness in the near future. However, a quick pullback rally is likely if the index succeeds to trade above 59,000.
"For the trend following traders now 59,000 would act as key resistance level. Below which, the correction wave will continue till 58,500-58,300. On the flip side, 59,000 would be the key resistance level for the bulls, above 59,000 the market could retest 59,300-59,400," says Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities. Technically, on the short-term time frame, the index consistently forming higher high and higher low formation which is broadly positive.
Stock Picks
COALINDIA: BUY, CMP 218.3, TARGET 230, SL 212 After the sharp upward rally, stock witnessed a price decline. However, at present reversal is seen from its important retracement zone, which suggests the resumption of bullish move.
BPCL: BUY, CMP 333.65, TARGET 350, SL 326 The counter is trading in an important retracement zone and a trend reversal from the current levels for bullish up move is very likely in the coming sessions.
TCS: BUY, CMP 3354.55, TARGET 3530, SL 3285 The stock is trading near its multiple support zone, hence the structure is indicating reversal from current levels for a fresh leg of up move in the near term.
COLPAL: BUY, CMP 1589.05, TARGET 1670, SL 1555 On the daily charts, the stock has represented a reversal formation from an important support zone. Additionally, strong bullish engulfing candlestick pattern hints at upside momentum in the coming horizon.
SIEMENS: BUY, CMP 2875.65, TARGET 3020, SL 2820
The counter has shown remarkable up move in the past few weeks. The structure is representing a bullish continuation chart pattern, which hints at an uptrend to persist in the near future.
(Source-Kotak Securities)
