Medium-Term Mkt Texture Still Positive

Mumbai: On Thursday, the benchmark indices witnessed a profit booking at higher levels. BSE Sensex was down by 412 points.Among sectors, almost all the major sectoral indices registered intraday profit booking at higher levels, but the India Tourism and Realty indices lost the most, shedding over two per cent.

Technically, on daily charts, it has formed a bearish candle, and on intraday charts, it is holding a lower top formation, which supports temporary weakness. However, the medium-term texture of the market is still positive.

Shrikant Chouhan, head (equity research), Kotak Securities, said: “We are of the view that, as long as the market is trading below 24,450/80900, the weak sentiment is likely to continue.” On the downside, it could retest the levels of 80,000-79,700. On the flip side, above 80,900, the sentiment could change. Above this level, we could move up to 81,200-81,400. The current market texture is non-directional. Hence, level-based trading would be the ideal strategy for short-term traders.

Prashanth Tapse, sr V-P (research), Mehta Equities, said: “There is a lot of caution in the markets as investors are worried that the ongoing tension resulting in a major conflict between the two nuclear-powered nations going ahead could spark a major sell-off in equities. Hence, profit-taking was seen in almost all the sectors barring select IT counters.” With the local currency depreciating sharply amid the ongoing stand-off, foreign investors could flee domestic equities to park their funds in overseas safe-haven assets.

Vaibhav Vidwani, research analyst, Bonanza, said: “The Indian stock market closed with a downside bias as the Sensex slipped, ending around 411 points lower at 80,334. Key reasons for the market’s decline was mixed global cues.”

The Nifty Metal sector was the worst performer, down 2.09 per cent, while the Nifty IT sector showed modest gains.

STOCK PICKS

Hindustan Copper | TRADE-SHORT SELL | CMP: Rs204 | SL: Rs210 | TARGETs: Rs195–Rs188

Hindustan Copper is under pressure after failing to hold above Rs210. The stock is showing signs of weakness and has started to form a downward pattern on the chart. If it breaks below Rs202–Rs200, it could see a quick fall toward Rs195 and possibly Rs188. Selling pressure is increasing, and traders can consider shorting at current levels with a strict stop loss at Rs210 to manage risk.

Reliance Industries | TRADE-BUY | CMP: Rs1,398 | SL: Rs1,365 | TARGETs: Rs1,440–Rs1,470

Reliance Industries has bounced back from key support around Rs1365 and is now showing early signs of recovery. The stock is trading near an important zone, and if it crosses Rs1,400 decisively, it could see a fresh uptrend toward Rs1,440 and Rs1,470. The setup offers a favourable risk-reward, and traders can look to buy around current levels or on small dips, with a stop loss at Rs1,365 to protect against any downside.

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