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Medium-term texture indicates sluggish trading

In the past week, the benchmark indices witnessed profit booking at higher levels

Markets begin 2024 on flat note

Markets begin 2024 on flat note

Mumbai: In the past week, the benchmark indices witnessed profit booking at higher levels. BSE Sensex closed at 59,135 points. Among sectors, PSU Banks and Reality indices corrected sharply whereas despite weak market sentiments Oil Gas and Energy indices outperformed, gained over one per cent.

During the week, after a strong opening the market once again took the resistance near 18000/60500, but due lack of follow-through buying interest, it corrected sharply. Meanwhile, the Bank Nifty also breached the important support level of 41,000 or 20-day SMA (Simple Moving Average), which is broadly negative. Below 41,000 the Bank Nifty could retest the level of 40,000-39,800.

Technically, the Sensex has formed a strong bearish candle on weekly charts and it comfortably trading below 20 and 50-day SMA. The medium-term texture suggesting weak formation is likely to continue in the near future.

For the positional traders now, 59,700 would act as a medium term resistance zone.

“We are of the view that, as long as the index is trading below the same, weak sentiment is likely to continue. below the same, the index could slip till 58,500. Further down side may also continue which could drag the market till 58,200,” says Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.

On the flip side, minor pullback rally possible, if the index succeeds to trade above 59,200 above which it could move up to 59,450-59,500.

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m Usha Martin: It’s forming higher high and higher lows pattern since past three consecutive days and huge volumes on upside the stock has seen strength. Currently at 208 levels which is important resistance the stock has closed near it indicating breakout awaited. Break above 208 could lead prices towards 220-225 levels on downside 200 seems to an important support level which should remain intact for upside traction to continue

m VrL: It’s witnessing swing momentum over short-term period. Bollinger bands seen to be tightened between level of 165-150. Currently the stock price is near base level of lower band and stock could se reversal towards upper band near 165 levels.)

(Source: Ravi Gangan, Technical Trader, Mehta Equities)

Kumud Das
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