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Pullback rally may continue in near term

58,500-58,750 immediate hurdle for index

Sensex forms long bullish candle
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Sensex forms long bullish candle

Stock Picks

- BANDHANBANK: Above Rs330 with a target of Rs342 and Stop loss of Rs320. The stock is in consolidating near the high and has reversed from the support of 8 and 40 EMA

- SRF: Above Rs2,505 with a target of Rs2,535 and Stop loss of Rs2,480. It has support of 8 and 40 EMA

- TCS: Above Rs3,840 with a target of Rs3,890 and Stop loss of Rs3,790. The stock has reversed from the support levels and is on the verge of a breakout in smaller time frame

- TITAN: Above Rs2,520 with a target of Rs2,560 and Stop loss of Rs2,485. It has a support of 8 & 40 EMA

- RELIANCE: Above Rs2,425 with a target of Rs2,475 and Stop loss of Rs2,385. It has support of 8 and 40 EMA

- CAPRIGLOBAL: Above Rs630 with a target of Rs650 and Stop loss of Rs610. It has support of 8 and 40 EMA

(Source: CapitalVia)

Mumbai: The benchmark indices bounce back sharply as NSE Nifty ends 509 points higher, while BSE Sensex up by 1,736 points. Among Sectors, all the major sectoral indices were traded in the green. Auto and PSU banks gained the most rallied over 3.5 per cent. Technically, after a sharp fall, the index took the support near 200-day SMA and reversed sharply.

On daily charts, the index has formed long bullish candles, which indicate the continuation of the pullback rally in the near term. However, in the short-term time frame, the market is still holding lower top formation and trading below 50 days SMA, which is largely negative for the index.

"We are of the view that the index completed one leg of the pullback rally and now 58,500 and 58,750 would be the immediate hurdle for the index, "says Shrikant Chauhan, head of equity research (Retail), Kotak Securities.

For the bulls as long as the index trading above 57,800 uptrend texture will continue till 58,500-58,750. On the flip side, quick intraday correction is not ruled out, if the index succeeds to trade below 57,800. Below the same, it could hit the level of 57,500-57,300, he added.

Kumud Das
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