Hold long positions with stop loss at 49,350
The blue-chip Sensex 30 index was down by 155 points. The Bank Nifty closed at the lowest point of the last eight weeks. The Bank Nifty was at 37,700 in the middle of February and it closed at 32,450 levels.
Sideways movement may continue
Mumbai: The blue-chip Sensex 30 index was down by 155 points. The Bank Nifty closed at the lowest point of the last eight weeks. The Bank Nifty was at 37,700 in the middle of February and it closed at 32,450 levels. On a daily basis, the BSE Sensex has formed an indecisive pattern, however, on a weekly basis, the Sensex has formed a Dragonfly Doji within the consolidation range of 52,515 and 48,235.
It is suggesting to us that the market is about to trend on either side. As we are of the view that we are in the corrective pattern to the previous strong trend, the Sensex should break on the upward side.
Above 49,900, the Sensex would arrest at 50,300, however, above 50,300 the Sensex would enter in the medium-term break out that may lift the market to 51,850 and 52,515 again. Until the bank stocks are not recovering from lower levels, we can't see the market is crossing 50,300 levels, below the levels of 49,350, the chances of downward continuation would turn bright. Supports would be at 49,200, 48,650 and 48,235 levels.
"Technology and commodity stocks should do well based on their weekly performance. The strategy should be to hold long positions with a final stop loss at 49,350 or reduce weak long positions below the same," says Shrikant Chouhan, EVP (equity technical research), Kotak Securities. During the week, FIIs turned net sellers for Rs 1,700 crore in the cash segment. The dollar index came off from the highs, but the Indian rupee also depreciated to the lowest levels of the last five months at 74.75 that could minimize inflows for our markets if the downward trend persists.
