Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
The benchmark indices witnessed volatile trading session, the Nifty ends 9 points lower while the Sensex was down by 37 points. Among sectors, profit booking continued in Metal and Financial stocks, both indices registered profit booking at higher levels. Whereas, some buying was seen in selective Pharma and IT stocks.
Technically, after a sharp fall the index opened in the green but corrected sharply. After early morning selloff the index witnessed range bound activity. Lower top formation intraday charts and bearish candle on daily charts indicating continuation of weakness in the near term.
However, momentum indicators suggesting strong possibility of pullback rally from the current levels. We are of the view that, the bearish sentiment in the market is still intact and fresh pullback rally possible, if the index succeeds to trade above 200-day SMA (Simple Moving average) or 16940/56950. Above which, the index could retest the level of 17150-17200/57500-57700.
On the flip side, below 16940/56950, it could slip till 17850-17800/56600-56500. The intraday texture of the market is non directional, hence level based trading would be the ideal strategy for the day traders.
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