Weak formation may continue
Fresh uptrend rally possible only after dismissal of 20-day SMA or 73,200, above the same, it could retest the level of 73,500-73,700. Below the same, the market could slip till 72,000-71,700
Mumbai: In the last week, the benchmark indices witnessed profit booking at higher levels, after a sharp decline, BSE Sensex shed over 1,600 points. Among sectors, majority of sectoral indices witnessed profit booking at higher levels. Realty and Media indices lost the most, shed nearly nine per cent.
Technically, on weekly charts, the index has formed long bearish candle and it also trading below 20-day SMA (Simple Moving Average) which is largely negative. “We are of the view that, as long as the index is trading below 20-day SMA or 73,200 the weak formation is likely to continue,” says Shrikant Chouhan, head (equity research), Kotak Securities.
Fresh uptrend rally possible only after dismissal of 20 day SMA or 73,200. Above the same, it could retest the level of 73,500-73,700. Below the same, the market could slip till 72,000-71,700. On the flip side, for the bulls 73,000 and 73,200 or 20 day SMA would be the key resistance areas.
For Bank Nifty, 50-day SMA or 46,500 would act as a sacrosanct zone, above the same, it could move up till 47,200-47,500. On the other side, below 50 day SMA uptrend would be vulnerable.
Prashanth Tapse, senior V-P (research), Mehta Equities, says: “Domestic equities followed global cues as weak US and Asian markets fuelled extended profit-taking as investors sold auto, oil & gas, banking and power stocks. The recent subdued economic readings related to inflation and IIP numbers too didn't help either, which further aggravated the bearish mood during the week.”
With uncertainty around, local investors will closely follow global markets to decide on their exposure to equities.
Stock Picks
Sandhar Technologies
CMP: 485.30 | SL: 465 | Target: 550
The stock has shown a strong retest of the anchor VWAP support level at 480 on its daily charts, with the overall bullish trend remaining intact. At the current market price of 485.30, the downside risk is minimal, and it is advisable to maintain a strict stop-loss at 465.00 for potential targets of 550.00 and higher.
Shriram Properties
CMP: 105.90 | SL: 99 | Target: 120
At the current market price of 105.90, the stock is trading near its significant support level of 100 on the hourly charts. The risk-reward ratio appears favorable for buying at current levels, with a strict stop-loss at 99.00 for potential targets of 120.00 and beyond. Additionally, the stock presents an attractive buying opportunity based on its daily chart analysis.
