Market heading for temporary weakness

Mumbai, Jul 22

Today, the benchmark indices witnessed lacklustre activity. The Sensex was down by 13 points.

Among sectors, the Digital index was the top gainer, rallying 1.10 percent, whereas the Media index lost the most, shedding 2 per cent. Technically, after a gap-up open, the entire day saw the market registering selling pressure throughout. On daily charts, the market is still holding a lower top formation and has also formed a bearish candle, which indicates temporary weakness.

“We believe that the current market texture is non-directional; hence, level-based trading would be the ideal strategy for day traders”, says Shrikant Chouhan, Head - Equity Research, Kotak Securities.

For traders, the 82,200 mark or the 50-day SMA (Simple Moving Average) would be the key support zone. As long as the market trades above this level, a pullback formation is likely to continue. On the higher side, 82,800 and the 20-day SMA or 83,100 would be the key resistance areas for the bulls. On the flip side, a breach of 82,200 could push the market towards 81,900. Further downside may also continue, which could drag the index down to 81,500.

Stock Picks

GMDC (Gujarat Mineral Development Corporation)

Buy at ₹458 | Stop‑Loss ₹435 | Target ₹510

GMDC has decisively broken above the ₹450–455 resistance band on rising volume, signaling renewed strength in the mining sector. The stock is now trading above both its 20-day and 50-day moving averages, confirming the shift to a bullish trend. The Relative Strength Index (RSI) stands around 66, indicating solid momentum with upside potential. Its price chart is forming higher highs and higher lows, reinforcing technical strength. As long as GMDC sustains above ₹435, it appears poised for a move toward ₹510 in the near term. Traders may consider entering on dips, using a protective stop-loss at ₹435.

Paradeep Phosphate

Buy at ₹189.75 | Stop‑Loss ₹180 | Target ₹220

Paradeep Phosphate is currently trading above its recent resistance of ₹185–190 on healthy volumes, suggesting strong investor interest in the fertilizer space. The stock remains above its 20-day and 50-day moving averages, affirming the bullish setup. The RSI sits near 67, reflecting positive momentum with room to grow. The chart structure, with higher highs and higher lows, further supports the potential for a rally. Provided it stays above ₹180, the stock is well-positioned to reach ₹220 in the near term. Traders may look to initiate positions on minor pullbacks, maintaining a stop-loss at ₹180.

(Source_Riyank Arora Technical Analyst at Mehta Equities)

EoM.