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.
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.