Pullback Formation Is Likely To Continue

Mumbai: On Tuesday, the benchmark indices bounced back sharply, with the Sensex up by 1,089 points. Among the sectors, all major sectoral indices traded in positive territory, but the Media Index gained the most, rallying over 5 per cent.

Technically, after a strong open market continued positive momentum throughout the day. Promising reversal formation and higher bottom formation on intraday charts suggesting pullback formation is likely to continue in the near future.

Shrikant Chouhan, Head-Equity Research, Kotak Securities, said: “For day traders now, 73,500 would be a key level to watch; above this level, a pullback wave could move up to 75,000, with further upside potentially lifting the index to 75,200.”

Conversely, a dismissal of 73,500 could accelerate selling pressure. If this level is breached, the market could retest 73,000-72,800. The current market texture is extremely volatile and uncertain; thus, a level-based trading strategy would be ideal for day traders.

Vaibhav Vidwani, Research Analyst, Bonanza, said: “Indian stock market rebounded strongly on April 8, with the Sensex surging over 1,000 points to close at 74,227. This recovery was driven by several factors, including positive global cues as Asian markets showed resilience and some easing of trade war fears as investors began to believe that the US-China trade tensions might not significantly impact other major economies.”

Hopes of a possible RBI rate cut to address liquidity challenges contributed to the upside. The market’s fear gauge, India VIX, dropped significantly, indicating reduced investor anxiety. Market expectations remain cautiously optimistic, with investors awaiting clarity on global trade developments and the RBI’s policy stance. Despite ongoing uncertainty, the stable macroeconomic fundamentals of India and fair valuations in large-cap stocks are expected to support the market in the long term. Overall, the market’s ability to bounce back from significant losses suggests a robust underlying sentiment, though investors are likely to remain in a wait-and-watch mode until more clarity emerges on global trade tensions.

STOCK PICKS

TRENT | TRADE-BUY | CMP: Rs4767 | SL: Rs4610 | TARGETs: Rs4950 and Rs5100

TRENT is in a strong uptrend with higher highs and solid price structure. The stock is trading above key short-term averages, indicating momentum is intact. Risk-reward remains favourable at current levels, and recent price action suggests potential for continuation. Buying on dips towards Rs4700 could offer a good entry with limited downside.

VEDANTA | TRADE-BUY | CMP: Rs376 | SL: Rs365 | TARGETs: Rs385 and Rs392

VEDANTA is hovering near its short-term support zone, and the overall trend remains sideways to mildly positive. A bounce from current levels looks likely, offering a decent risk-reward setup. If Rs372 holds, it can move toward Rs390+ levels. Ideal for a tactical short-term buy with a strict stop below Rs365.

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