Interim weakness may continue
As long as the market is trading below 73,800 pts, the weak sentiment is likely to continue
Mumbai: On Monday, the benchmark indices witnessed a profit booking at higher levels as BSE Sensex was down by 617 points. Among sectors, Media index shed over three per cent whereas some buying interest was seen in selective pharma and healthcare stocks. Technically, after a muted opening, the market consistently witnessed selling pressure at higher levels.
“On daily charts, the index has formed bearish candle, which indicates temporary weakness is likely to continue in the near future. However, the short-term texture of market is still in to the positive side. We are of the view that, as long as the market is trading below 73,800 the weak sentiment is likely to continue. Below which, the market could slip till 73,200-73,000. On the flip side, technical pullback possible only after dismissal of 73,800. Above 73,800, the market could retest the level of 74,000-74,200,” says Shrikant Chouhan, head (equity research), Kotak Securities.
Contra traders can take long bet near 73,000 with strict 100 points stop loss.
Prashanth Tapse, senior V-P (research), Mehta Equities, says: “After lingering in negative territory for most part of the trading session, markets ended with steep losses after selling intensified towards the fag-end. Weak global cues contributed to the overall weakness as local investors cut their exposure to banking, telecom, power and realty stocks.”
Stock Picks
Hindustan Petroleum Corp Ltd (HINDPETRO)
Buy | CMP: 510.45 | SL: 485 | Target: 575
The stock is re-testing its breakout mark of 500 on its weekly charts and indicating good signs of momentum and strength. With the overall trend being positive and the stock witnessing good volume pick-up, it seems poised for a good up-move towards 550 and 575 in a spree of momentum rally. A set stop loss at 485 should be kept to manage risk well.
BPCL
Buy | CMP: 625 | SL: 600 | Target : 675
The stock is giving a good retest to its breakout mark and the overall outlook on petrochem stocks look positive. We can see a good up-move towards 650 and 675 as the stock maintains its momentum and strength.
(Source_Riyank Arora Technical Analyst at Mehta Equities)
