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Advise for traders to refrain from taking fresh positions

57K will act as a trend decider level

Equity indices open marginally high

Equity indices open marginally high

Stock Picks

- BEML: Above Rs2,041 with a target of Rs2,061 and Stop loss of Rs2021. The stock is in upward trending channel and has given the breakout.

- ADANITRANS: Above Rs1,897 with a target of Rs1,915 and Stop loss of Rs1,879. It has support of 8 and 40 EMA.

- BRIGADE: Above Rs490 with a target of Rs494 and Stop loss of Rs486. The stock is in upward trending channel and is on the verge of a breakout.

- SOBHA: Above Rs843 with a target of Rs851 and Stop loss of Rs835. It has a support of 8 EMA.

- METROPOLIS: Above Rs3,250 with a target of Rs3,282 and Stop loss of Rs3,218. It has reversed from the support of 8 EMA.

Mumbai: On Monday, the benchmark indices extended losses, the BSE Sensex down by 949 points. All major sectoral indices were in the red, but Nifty IT index lost the most shed over 2.5 per cent. After a last Friday sharp fall, the Sensex opened on a muted note and quickly broke the 57,500 support-level. Post breakdown it remains under pressure of profit booking. The market continued weak momentum second day in a row, from last 2 days the Sensex corrected over 2050 points. Technically, the index has formed long bearish candle and it succeeded to close below 57,000 mark, which is broadly negative for the market.

However, on intraday charts market looks extremely oversold, but as long as the Sensex doesn't surpass 57,000 intraday breakout level, the weak wave remains intact. "For the day traders, the texture is volatile and weak and now 57,000 would act as a trend decider level. Below the same, the correction wave will continue up to 56,500-56,300," says Shrikant Chauhan, head of equity research (retail), Kotak Securities.

On the flip side, above 57,000 intraday breakout, the pullback rally could move up to 57,300-57,500. Contra traders can take a long bet near 56,300 level with strict 56,150 support stop loss, he added.

Another analyst said: "We witnessed some correction in the market after a failed attempt to sustain the BSE Sensex 30 Index level of 57,700. Our research suggests that 56,800 will be an important support level in the market. If the market is unable to sustain the market levels of 56,800, we will witness correction to continue in the market till the level of 56,350."

Technical indicators, it added, suggest a volatile movement in the market. As such we take a cautious stance and advise the traders to refrain from building a fresh buying position, until We see further improvement in the market conditions."

Kumud Das
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