Pullback is likely to continue near future

The benchmark indices continued their positive momentum, with the Sensex was up by 568 points. Among sectors, Metal, Auto, and Capital Market indices rallied over 2 per cent, whereas despite strong market momentum, profit booking was seen in IT stocks, resulting in the IT index shedding nearly 1 per cent.

Technically, after a muted open, the index is comfortably trading above the 75,300 support zone. A bullish candle on daily charts and an uptrend continuation formation on intraday charts indicate that a pullback is likely to continue in the near future.

“For day traders, 75,500-75,300 would act as crucial support zones,” says Shrikant Chouhan, Head - Equity Research, Kotak Securities.

Above these levels, the pullback could continue till 76,500. Further upside may also persist, potentially lifting the index to 77,000.

On the flip side, below 75,300, sentiment could change. If the index drops below this level, traders may prefer to exit their long positions.