Mkt may further weaken from current levels

Mumbai, Jul 11

In the last week, the benchmark indices witnessed profit booking at higher levels. The Sensex was down by 925 points.

Among sectors, despite weak market sentiment, the FMCG index outperformed, rallying 2.20 per cent, whereas the Defence and IT indices corrected sharply, Defence down 4.50 per cent and IT corrected by 3.90 per cent. During the week, the market witnessed range-bound activity, but on last Friday, it breached the important support level of 83,000, and post-breakdown, selling pressure intensified.

Technically, on weekly charts, it has formed a bearish candle, and on daily charts, it has formed a lower top formation. Additionally, after a long time, Nifty slipped below the 20-day SMA (Simple Moving Average) zone, which supports further weakness from the current levels.

“We believe that as long as the market remains below 83,000, the weak sentiment is likely to continue,” says Amol Athawale of Kotak Securities.

Below this level, the market could slip to the 50-day SMA or around 82,100. Further downside may also continue, potentially dragging the market down to 81,500-81,100.

On the other hand, if the market trades above 83,000, sentiment could improve. If the market manages to stay above this level, it could move up to 83,700-84,000.

Prashanth Tapse, Senior VP (Research), Mehta Equities says, “While weak European market cues and negative US Dow Futures weighed on sentiment, the disappointing start to earnings season by software major TCS cautioned investors about the sluggish global demand scenario that led to heavy selling in IT, telecom, auto, realty and oil & gas stocks.”

While all eyes will be on the outcome of the trade negotiations with the US, markets could see increased volatility in the near term.

Stock Picks

Usha Martin

Buy at ₹370 | Stop‑Loss ₹345 | Target ₹430

Usha Martin has broken above the ₹360–370 resistance zone on rising volume, signalling renewed bullish interest in its turnaround story. The stock is now trading above its 20-day and 50-day moving averages, indicating positive technical strength. The Relative Strength Index (RSI) is near 66, reflecting healthy upward momentum without being overbought. The daily chart shows a trend of higher highs and higher lows, supporting continued upside potential. As long as Usha Martin holds above ₹345, the stock could rise toward ₹430 in the near term. Traders may consider accumulating on dips with a protective stop-loss at ₹345.

Waaree Energies

Buy at ₹3,112 | Stop‑Loss ₹2,950 | Target ₹3,450

Waaree Energies has staged a decisive breakout above the ₹3,050–3,100 range on strong volume, signaling sustained interest in the renewable energy sector. The stock is trading above both its 20-day and 50-day moving averages, confirming robust technical momentum. The RSI stands at 68, indicating strong, yet not overbought, momentum. The stock’s chart structure shows well-defined higher highs and higher lows, reinforcing the positive setup. If it sustains above ₹3,050, Waaree Energies could move toward ₹3,450 in the short term. Traders may consider buying on dips, using ₹2,950 as a prudent stop-loss.

(Source_Riyank Arora Technical Analyst at Mehta Equities)

EoM.