Market Texture Is Largely Negative

Mumbai: In the last session of the week on Friday, benchmark indices continued profit booking at higher levels. Benchmark Sensex was down by 156 points. Among sectors, auto, consumer and metal indices corrected sharply while despite weak sentiment some buying were seen in selective banking and financial stocks.

During the week, the market slipped below 50 day SMA (Simple Moving Average) and it breached the crucial support level of 81,500 but on last Friday, it trimmed some losses and eventually closed at 81,200. Technically, on weekly charts, it has formed bearish candle on daily charts and it is holding lower top formation, which is largely, negative.

Amol Athawale, VP-Technical Research, Kotak Securities, said: “We are of the view that, the larger market texture is still into the weak side but fresh selloff possible only after dismissal of 80,800. Below the same, market could slip till 80,500-80,300. On the flip side, 81,500 could be the immediate resistance zone for the bulls. Post 81,500 the pullback momentum is likely to continue till 82,000-82,200.”

Prashanth Tapse, Senior VP-Research, Mehta Equities, said: “Markets reversed the 3-day fall as investors resorted to value buying in banking, metals and realty stocks which had seen sharp downfall in recent sessions. Geo-political uncertainty coupled with sluggishness in the Chinese economy and persistent FII outflows from the domestic markets have led to caution.”

Domestic market showed resilience, recovering from early losses to close positively. The BSE Sensex gained 218 points, ending at 81,224, while the Nifty 50 rose above 24,850. This rebound was primarily driven by gains in the banking and metal sectors, despite ongoing concerns over disappointing earnings reports from major companies like Bajaj Auto and Nestle, which have dampened market sentiment. As earnings season progresses, investors are opting cautious approach, focusing on stocks with strong earnings visibility in this uncertain environment, said Vaibhav Vidwani, Research Analyst.

STOCK PICKS

MGL | TRADE-BUY | CMP: Rs1587 | SL: Rs1500 | TARGET: Rs1700+

MGL has exhibited strong bullish momentum after breaking above its recent consolidation phase, with a key resistance level cleared at Rs1560. The stock’s RSI (14) is hovering around 68, indicating ongoing strength and positive sentiment. A buy is recommended at Rs1587, with a stop loss set at Rs1500 to limit downside risk. With strong volume and continued momentum, the stock is expected to reach Rs1700+ in the short term.

NESTLE INDIA | TRADE-BUY | CMP: Rs2350 | SL: Rs2290 | TARGET: Rs2450+

Nestle India has shown resilience and strength, maintaining its upward trajectory after rebounding from its recent support at Rs2300. The RSI (14) is at 70, suggesting strong buying momentum, with the potential for further gains. A buy is recommended at Rs2350, with a stop loss at Rs2290 for risk management. Target levels are set at Rs2450+, supported by continued buying interest and volume surges.

(Source_Riyank Arora Technical Analyst at Mehta Equities)