Further uptrend possible

On the backdrop of strong global cues, the benchmark indices witnessed a promising uptrend rally as BSE Sensex was up by 930 points. Among sectors, almost all the major sectoral indices were traded in the positive territory, but Reality and IT indices rallied the most, gained over three per cent.

Technically, after a strong gap-up opening entire day the index hovered between 70,400 to 70,600 points. A bullish candle on daily charts and uptrend continuation formation on intraday charts supports further uptrend from the current levels. However, momentum indicators are indicating the current texture is overbought and we could see one quick intraday correction from the current levels.

“For traders now, 70,100 would act as key support level. As long as the index is trading above the same, uptrend formation is intact. Above the same, the market could move till 70,750-70,900,” says Shrikant Chouhan, Head, Equity Research, Kotak Securities.

On the flip side, below 70,100 points, the uptrend would be vulnerable. Below the same, traders may prefer to exit out from the trading long positions. Below 70,100pts, the market could slip till 69,900-69,800 points.

Prashanth Tapse, senior V-P (research), Mehta Equities says: “The US Fed’s decision to leave rates unchanged lifted the world equity market mood, including India, which saw benchmark indices reach yet another record highs on the back of a frenzied buying support.”

Besides, falling crude oil prices and foreign investors pumping in money into domestic equities has bolstered investors’ sentiment. With India continuing to post strong growth numbers and hopes of rate cut expected in the middle of next year, optimism in equity markets could continue in the medium term.