Level-based trading is ideal strategy for day traders

The benchmark indices experienced a pullback rally. The Sensex was up by 939 points. Among sectors, Auto and Financial indices rallied over 1 per cent, whereas Oil & Gas and Realty indices lost the most, shedding over 1.5 per cent.

Technically, after an intraday correction, the market took support near 74,000 and bounced back sharply from the day’s lowest level, rallying over 1,800 points.

A reversal formation on intraday charts and a bullish candle on daily charts indicate that a pullback move is likely to continue in the near future.

“For day traders, 75,200 and 75,000 would act as key support zones,” says Shrikant Chouhan, Head - Equity Research, Kotak Securities.

As long as the market is trading above these levels, the pullback formation is likely to continue. On the higher side, 76,000 and 76,500 would serve as key resistance areas for the bulls. Conversely, below 75,000, the uptrend would become vulnerable. If that level is breached, the market could retest the levels of 74,300-74,000.

The current market texture is volatile; hence, level-based trading would be the ideal strategy for day traders.