Weak sentiment is likely to continue
74,000 would act as a key resistance zone. Below the same the market could slip till 73,400-73,200
Mumbai: On Tuesday, the benchmark indices witnessed range bound activity, the Sensex was up by 165 points. Among Sectors, Reality index lost the most shed 3.7 per cent whereas intraday buying were seen in selective IT stocks.
Technically, after intraday technical bounce back the Sensex took the resistance near 74,000 and corrected sharply. On intraday charts, it is still holding weak texture which indicating weak sentiment is likely to continue in the near future.
Shrikant Chouhan, Head Equity Research, Kotak Securities, said: “For the day traders now, 74,000 would act as a key resistance zone. Below the same, the weak texture is likely to continue. Below 74,000, the market could slip till 73,400-73,200.” On the flip side, above 74,000 the sentiment could change. Above which, the market could bounce back up to 74,600-74,700.
Prashanth Tapse, Senior VP (Research), Mehta Equities says, “Buying in select frontline stocks helped key benchmarks to end in positive territory in a volatile trading session, although markets witnessed broad-based selling, especially in realty, power and capital goods stocks.” The focus is on the inflation readings to be released in the US and India, as any further moderation would improve the prospects of a rate cut by the Fed.
Stock Picks
Canara Bank (Buy)
Cmp : 566.45 | SL : 540.00 | Target : 600.00
The stock is seen to retest its breakout level on daily and weekly charts. With a strong technical structure on its monthly charts and overall good momentum in the stock, we can see the stock. A strict stoploss should be placed at 540 mark for potential upside towards 600 and above.
Quick Heal (Buy)
Cmp : 577.00 | SL : 550.00 | Target : 625.00
The stock has given a breakout above its recent resistance mark of 570 on its daily charts and showing good sign of momentum pick up. With the overall trend being positive and the stock rising despite negative market conditions, it is set for a good rally in near future. A set stoploss should be kept at 550 mark for potential target of 625 and above.
(Source_Riyank Arora Technical Analyst at Mehta Equities)
