Sensex completes one leg of correction, bounces back sharply
Fresh uptrend rally possible only after dismissal of 65,230pts, above which, the index could rally till 65,500-65,650; On flip side, below 64,800 the sentiment could change; Below which, the market could slip till 64,600-64,500
image for illustrative purpose
Mumbai In the last week, the benchmark indices witnessed volatile activity, after a roller coaster momentum as BSE Sensex ends at 65,387 points. Among sectors, buying were seen in Reality and Metal stocks, Reality gained 5.40 and Metal index up by five per cent whereas profit booking were seen on Banking and FMCG stocks.
Technically, after a long correction, on daily and intraday charts the index has formed Double Bottom formation, which indicates strong possibility of fresh uptrend rally from the current levels. In addition, long bullish candle on daily charts also supports further uptrend from the current levels.
“We are of the view that, the index completed one leg of correction and bounce back sharply,” says Amol Athawale, vice-president (technical research), Kotak Securities.
For the bulls now, 64,750 would act as a sacrosanct support zone. Above the same, the index could rally till 66,000 points. Further, upside may also continue which could lift the index till 66,200 points. However, below 64,750pts uptrend would be vulnerable.
Below which, the index could slip till 64,400-64,100 points. For Bank Nifty traders, the 44,200 level would be the crucial support level, above the same, it could move up till 44,700 and 45,000pts on the flip side, below 44,200 it could slip till 43,900-43,700 points.
Amol Athawale, vice-president (technical research), Kotak Securities, said: “Technically, currently the market is witnessing positive consolidation near 50-day SMA for the bulls now fresh uptrend rally possible only after dismissal of 65,230,” says Shrikant Chouhan of Kotak Securities.
Above which, the index could rally till 65,500-65,650. On the flip side, below 64,800 the sentiment could change. Below which, the market could slip till 64,600-64,500.
Vinod Nair, head (research) at Geojit Financial Services, says, “the buoyancy of the global market in anticipation of no further Fed rate hikes, due to subdued economic data, was noticeable in the Indian market as well. However, heavyweight stocks were muted compared to the sector-wise and mid & small-cap upsides.”
Meanwhile, the metals sector rallied in anticipation of further green shoots from the Chinese government and central banks, aimed at improving the local economy. The benefits from festival demand were evident in sectors such as consumer durables, manufacturing, power, and real estate, he said.
