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Quick pullback rally likely

The benchmarks finally ended a super volatile session on a positive note, thanks to short covering in heavyweight stocks like Reliance Industries, Infosys & Bajaj Finance. Bank Nifty was unfortunately an underperformer. Even the broader markets were not in sync with the up move as Midcap & Smallcap indices ended in red.

Sensex forms long bullish candle
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Sensex forms long bullish candle

Stock Picks

- ABB: Above Rs2,269 with a target of Rs2,291 and Stop loss of Rs2,247. The stock is in upward trending channel and has given the breakout

- AMBER: Above Rs3,450 with a target of Rs3,484 and Stop loss of Rs3,416. It has support of 8 and 40 EMA

- BSOFT: Above Rs507 with a target of Rs512 and Stop loss of Rs502. The stock is in upward trending channel and is on the verge of a breakout

- CENTURYTEX: Above Rs879 with a target of Rs887 and Stop loss of Rs871. It has a support of 8 EMA

- JKCEMENT: Above Rs3,584 with a target of Rs3,619 and Stop loss of Rs3,549. It has reversed from the support of 8 EMA

(Source-CapitalVia)

Mumbai: The benchmarks finally ended a super volatile session on a positive note, thanks to short covering in heavyweight stocks like Reliance Industries, Infosys & Bajaj Finance. Bank Nifty was unfortunately an underperformer. Even the broader markets were not in sync with the up move as Midcap & Smallcap indices ended in red. The picture has become murkier for benchmarks in near term as Fed has signalled three rate hikes for 2022. Prashant Tapse, vice-president (research) at Mehta Equities, says: "The Fed has also said it will trim $30 billion from its original $120 billion program of monthly purchases of Treasuries and mortgage-backed securities, up from a $15 billion cut previously outlined. Digging deeper, the headline US inflation for November was up 0.8 per cent M-o-M and 6.8 per cent Y-o-Y – the fastest annual pace since 1982 this ideally means more aggressive action from the Fed sooner than later."

Among Sectors, profit booking continued in media and PSU banks, while Nifty IT Index outperformed and rallied over one per cent. Technically, on intraday charts the index has maintained lower top formation and one more time witnessed selling pressure near 58,350 which is broadly negative for the market. However, in this week so far, the index corrected over 1150 points and now it is trading near important retracement support levels. "We are of the view that, the short-term texture of the market is still in to the weak side, but strong possibility of one quick pullback rally is not ruled out, it the Sensex succeed to trade above 58,350," says Shrikant Chauhan, head of equity research (retail), Kotak Securities.

The correction wave will continue up to 57,700-57,500. On the flip side, for the bulls 58,350 would be the intraday breakout level, above the same, the reversal formation will persist up to 58,600-58,800, he said.

Kumud Das
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