Minor pullback rally possible
Charts are indicating Double Top formation on daily and intraday charts and bearish candle on daily charts
♦ Weak sentiment is likely to continue below 66,350
♦ Quick intraday rally likely above 66,000 rally till 66,300
♦ Investors prefer to book profit amid weak global sentiments and escalating ME tensions
♦ Q2 earnings by IT & financials sectors disappointed investors
Mumbai: On Wednesday, the benchmark indices corrected sharply as BSE Sensex was down by 551 points. Among sectors, profit booking were seen in banking and financial stocks whereas pharma stocks witnessed buying interest at lower levels. Technically, one more time, the index took the resistance near 66,500 and corrected sharply.
Charts are indicating Double Top formation on daily and intraday charts and bearish candle on daily charts. It’s further showing weakness from the current levels.
“We are of the view that, as long as the index is trading below 66,350 the weak sentiment is likely to continue. Below the same, the market could slip till 65,600-65,500. On the flip side, a minor pullback rally possible if the index surpassed the intraday resistance of 66,000 above the same, we could see one quick intraday rally till 66,300,” says Shrikant Chouhan of Kotak Securities.
Profit booking ensued in Indian markets, spurred by weak global sentiments and escalating Middle East tensions.
Vinod Nair, Head of Research at Geojit Financial Services, says: “A sudden rise in the tension has led to instability in energy prices; Brent prices rapidly rose above $92.5 by the day’s closing time. While the US bond yields was cautiously placed, awaiting the Fed chair’s speech. The initial Q2 earnings disappointments by the IT & financials sector may have prompted attention in the domestic markets.”
All these all factors are presumed to be a knee jerk reaction as the total outlook on domestic market is stable, underpinned by healthy Q2 result forecast and favourable fiscal position.
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