Medium term texture of market still positive
As long as the index is trading below 74,500, it could slip up to 73,900-73,500. On the flip side, above 74,500 the sentiment could change and market could retest the level of 75,200
Mumbai: This week, the benchmark indices witnessed profit booking at higher levels.The Sensex closed at 74,245.
Among sectors, metal, oil and gas indices outperformed, both indices rallied over 2 per cent whereas pharma and PSU banks indices shed over 1.5 per cent. During the week, Sensex registered a fresh all time high of 75,124.28, but due to profit, booking at higher levels on last Friday it corrected sharply.
Technically, on daily chart, the market has formed a reversal formation and on weekly charts, it has formed shooting star candlestick pattern, which indicates temporary weakness. However, the medium term texture of the market is still in to the positive side.
“We are of the view that, as long as the index is trading below 74,500, the weak sentiment is likely to continue. Below which, the market could slip up to 73,900-73,500. On the flip side, above 74,500 the sentiment could change,” says Amol Athawale, Vice President, Technical Research, Kotak Securities.
Above the same, the market could retest the level of 75,200. Further upside may also continue which could lift the market till 75,700. For Bank Nifty, 48,800 could act as a trend decider level for the short-term traders. Below the same, it could drag till 48,000-47,820. On the other side, above 48,800 it could move up till 49,100-49,500.
A sharp rise in crude oil prices and rupee’s downward spiral also dampened the sentiment and contributed to the overall slump.
STOCK PICKS
McDowell-N
CMP: 1182.95 | Stop loss: 1150.00 | Target: 1250.00
The stock has given a strong breakout above its all-time high resistance mark of 1182.15 and is seen to be re-testing its breakout level. With the RSI (14) on daily charts near 52, the overall momentum looks strong, and the stock is poised for potential targets of 1250 and above, with a set stop loss at the 1150 mark.
IDFC First Bank
CMP: 84.35 | Stop loss: 81.50 | Target: 90.00
The stock gave a good breakout above its trendline resistance mark of 84 and successfully managed to close above the same. With the RSI (14) on daily charts around 63.95, the overall momentum looks strong. Good volume pickup is also a positive sign for the stock, and we are looking at targets of 90 and above coming in on the stock. A strict stop loss at 81.50 should be kept.
(Source_Riyank Arora Technical Analyst
at Mehta Equities)
