Buy heavyweight cos between 50.5K & 50.2K
- DRREDDY - above 4710 with a target of 4780 and Stop loss of 4650. It has reversed from the support of upward trending line.
- TECHM - Above 1020 with a target of 1045 and Stop loss of 1000. It is an upward trending channel and on the verge of a breakout.
- TCS - Above 3090 with a target of 3180 and Stop loss of 3040. It is an upward trending channel and on the verge of a breakout.
- VBL - Above 980 with a target of 1008 and Stop loss of 960. It has a support of 8 and 40 DMA.
- GODREJPROP - Above 1536 with a target of 1575 and Stop loss of 1505. It has reversed from the support of 8 EMA.
Mumbai: After a stellar rally from 46,200 to 52,516, currently, the market witnessed selling pressure. From last four days, index corrected over 500 points. The sell-off was so intense that the market could not sustain above the lowest levels of the previous week that was at 50,846. However, the closing was slightly above the same at 50,890 levels.
On a weekly chart, the index has formed a bar reversal candlestick pattern that clearly suggests that in the short term weakness might continue in the near future. However, the medium-term texture of the market is still bullish and likely to continue if the Sensex manages to trade above 51,000 levels. In such a scenario, we could see 51,600 levels where the market has spent maximum time during the recent fall.
On the flip side, a decisive break of 50,600, would result in retesting of 50,150, which was earlier resistance for the market before the announcement of the Union Budget. On Friday, the reason for the sharpest drop was the sudden jump in the 10 years GSec prices from 6.02 to 6.13, otherwise, the fall in the dollar index from 101 to 90.25 and cooling off in crude prices from 64 to 62.50 were positive surprises.
"The strategy should be to buy strong and heavyweight companies between 50,500 and 50,200 levels with a stop loss at 49,750," says Shrikant Chouhan, EVP, equity technical research at Kotak Securities. During the week, despite rising dollar index, FIIs bought to the tune of Rs 4200 crores in the cash segment till Thursday. Sector Specific: PSU Banks and PSE Indices did extremely well and closed 10.50 and 6.75 higher respectively. In the coming week, till the market is not stabilizing our focus should be on defensive sectors, he added.