Market May Weaken Further

Mumbai: On Thursday the benchmark indices corrected sharply. BSE Sensex was down by 1,769 points. Among sectors, all the major sectoral indices were traded into the red, but Reality index lost the most shedding 4.60 per cent. Technically, after gap-down open, the market breached the important support of 20-day SMA (Simple Moving Average) and post breakdown the selling pressure intensified. A bearish candle on daily charts and correction continuation formation on intraday charts are indicating further weakness from the current levels.

Shrikant Chouhan, head (equity research), Kotak Securities, said: “We are of the view that, as long as market is trading below 82,800 level, the weak sentiment is likely to continue. On the downside, it could slip till 82,200-82,000 or 50-day SMA. On the other side, one quick technical pullback is likely if the market succeeds to trade above 82,800. Above the same, it could bounce back till 83,100-83,300. The current market texture is volatile. Hence, the level-based trading would be the ideal strategy for the day traders.”

Prashanth Tapse, senior V-P (research), Mehta Equities, said: “There was carnage on Dalal Street as markets plunged on across-the-board selling pressure on twin concerns of foreign funds pulling out funds from emerging markets including India and steadily increasing exposure to Chinese markets after the recent stimulus measures, while the escalating tensions in West Asia too has set alarm bells amongst the investors.” The second quarter earnings starting with frontline IT companies will set the tone of the market in the next few days. Also, Indian markets had witnessed stupendous rally over the past one month and the correction was in the waiting for some time.

STOCK PICKS

BUY: Exide Industries | CMP: Rs496.35 | SL: Rs75 | Targets: Rs525, Rs550

Exide Industries has decisively broken past its recent swing high resistance of Rs492.50, signalling a strong bullish breakout. With key support at Rs475, the stock presents a favorable risk-to-reward setup. The re-test of its breakout level further reinforces the opportunity for upside movement. A rising RSI, coupled with increasing volume, supports the stock’s potential to reach short-term targets of Rs525 and Rs550.

BUY: Granules India | CMP: Rs595 | SL: Rs580 | Target: Rs625

Granules India has surged past a critical anchor VWAP resistance at Rs590, accompanied by a significant rise in volume—a clear precursor to further price gains. The stock’s RSI, currently at 50, is showing upward momentum, signalling growing buying interest. This breakout points to a continuation of the upward trend, with a target of Rs625 in the near term. To manage risk effectively, traders should set a stop-loss at Rs580 to safeguard against potential pullbacks.

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

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