Pullback formation may continue in near future

The benchmark indices bounced back sharply, with the Sensex was up by 900 points. Among sectors, Capital Market, Defence, and Metal indices gained over 2 percent, whereas intraday profit booking was seen in IT stocks, resulting in the IT index closing in the negative territory.

Technically, after a positive open, the market held positive momentum throughout the day. A bullish candle on daily charts indicates that a pullback formation is likely to continue in the near future.

“For traders, 79,500 and 79,200 would act as key support zones,” says Shrikant Chouhan, Head - Equity Research, Kotak Securities.

Above these levels, the market could continue its positive momentum up to 80,500-80,700. On the flip side, below 24,500/79200, the sentiment could change. Below this level, traders may prefer to exit their long positions.