From moderate slips to 52-week lows, wild swings mark Budget day trading

Yoganand D BL Research Bureau | Updated on January 20, 2018 Published on February 29, 2016




Stocks from across sectors vie for spotlight

Though the broader indices the BSE Sensex and Nifty 50 opened the session on a positive note, they subsequently entered the negative territory after taking cues from Asian markets which were down by over 1 per cent. Domestic indices were resilient, trading marginally in the negative zone, until the Budget speech started. The markets which were slightly choppy witnessed a sharp fall after the announcement of an increase in DDT and STT. The bellwether indices plunged upto 2.9 per cent intraday to record their 52-week low.

The indices consequently managed a smart recovery to trade in the positive territory. However, end-of-day profit-booking pulled the index back into the red zone. Both the indices ended the session with 0.6 per cent decline.

Active stocks

Many stocks were in the spotlight across sectors during the session. Here is the technical analysis for three stocks that sizzled.

IDBI Bank (₹58.4): Following the announcement that the government is committed to reducing its stake in IDBI Bank to under 50 per cent, the stock attracted trading interest and surged 16 per cent to record an intraday high at ₹64.5. But, the stock trimmed its gains to 5 per cent. The stock witnessed 10 times more volume than the average.

The stock tests a key resistance at ₹60. An emphatic breakthrough of this resistance can take the stock northwards to ₹70 and then ₹75. To alter the medium-term downtrend, the stock needs to decisively move past ₹75. Such a rally can take it higher to ₹85 or ₹95 in the medium term. But, a slump below the immediate support level of ₹52 can drag the stock to ₹47 or even to ₹43 in the same period.

Maruti Suzuki (₹3,242.6): In the automobile sector, the stock of Maruti Suzuki was impacted by the announcement of the additional duty. It tumbled almost 5 per cent accompanied by above-average volume. Since encountering a key medium-term resistance at ₹4,750 in November 2015, the stock has been on an intermediate-term downtrend.

On Monday, this downtrend got strengthened and the stock breached a key support at ₹3,400. This selling pressure could continue in the short term and the stock could decline to ₹3,000 or even to ₹2,840, which is the 50 per cent Fibonacci retracement level of the prior uptrend. On the upside, the stock needs to move above the key resistance zone between ₹4,100 and ₹4,200 to alter the ongoing downtrend and take it upwards to ₹4,445 and ₹4,700 in the long run. Immediate resistances are placed at ₹3,400 and ₹3,800.

Shakti Pumps (₹108.5): This small-cap stock witnessed a spike in volume of more than 12.5 times its usual volume and jumped 12 per cent on Monday, following the announcement to spend ₹86,500 crore on irrigation projects. Recently, the stock had taken support at ₹95.

Triggered by positive divergence and the Budget, the stock changed direction. The stock can now extend its bullish momentum and encounter resistance at ₹121, going forward. Further breakthrough of this resistance level can push the stock northwards to ₹140 and then to ₹162 in the medium term. On the other hand, a strong plunge below the immediate support level of ₹95 can reinforce the bearish momentum and drag it down to ₹80 or even to ₹70 in the medium term.

Published on February 29, 2016
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