Stock picks of the day: 11,430 is the last ray of hope for the bulls

Last Friday, post the Budget, market participants looked disappointed, which triggered massive sell-off, especially in some of the marquee outperformers.

To make it worse, we had a decent gap-down on Monday which accelerated as the day progressed. Eventually, Monday’s session turned out to be the weakest day of the current calendar year.

Fortunately, this mayhem got arrested on the following day and then we witnessed a mild recovery throughout the remaining part of the week to eventually conclude the week with a fall of a little over 2 percent.

This week’s low of 11,461 holds a lot of significance because it coincides with multiple technical evidences such as (i) 61.8 percent retracement of the recent rally (11,108 – 12,103), (ii) Trend line joining previous lows and (iii) The vicinity of the bullish gap formed after exit poll numbers.

For the time being, the market has respected this crucial junction but going ahead, it would be important to see how the index behaves around it.

In case of a breakdown below 11,460 – 11,430, the selloff is likely to escalate to test lower levels 11,250 - 11,230 or even a move towards May lows (11,108) cannot be ruled out.

So till the time we are trading above 11,460, there is still hope for the bulls. However, on the upside, previous support of 11,640 is now acting as a sturdy wall.

If the index has to regain any strength, it needs to convincingly surpass this hurdle of 11,640-11,700. For a time being, 11,430–11,640 would be seen as a crucial range for the index.