Sensex Technical View:
In the last two sessions the drop in Sensex has been majorly due to the banking index and Reliance. Many PSU banks have dropped 5-10%. Is it because of a downgrade by Morgan Stanley or is it the sudden change in expectation of RBI rate hike from 0.25 bps to 0.50 bps.
Seems Index is factoring in a 50 bps hike but for use would stick to the technical levels. 18700 the previous breakout point will be a good entry point on declines. The gap support at 18373-18480 also remains a very strong support.
We may expect the index to bounce to 19k post a dip to 18700 or lower. Buy on dips with a stoploss of 18370.
Stocks to watchout for :
SBI --- Should bottom out in the next few sessions
LNT – Bottom out or a breakdown stoploss 1530.
Divis Labs – Excellent Medium Term pick …. 740-800
BPCL – Is a Petrol price hike on cards – Seems so as per the chart