Sensex due for short term uptrend
Real trend will emerge only if Sensex manages to cross 68,000 levels
Pre-Market Setup for Monday: Things to know before opening bell
The stock market has shown a sharp downward trend in the middle of this week. However, Sensex recovered on Friday from the lows and closed at 65,800, gaining 290 points, which could provide some relief for bulls.
Since the start of the month, the market displayed highly volatile trend. It failed consistently at 66,200-66,400 levels while found support below the levels of 65,700.
“Based on the technical formation, we believe that the market is due for the short term upward pull back in the near term. It has formed long legged doji formation, which could invite trending activity on either side,” says Amol Athawale of Kotak Securities.
On the other side, above 66,400, it would move to 67,000-67,500 levels. The real trend will emerge only if Sensex manages to cross 68,000 levels.
Regarding Bank Nifty, 44,750 would be the crucial resistance level. As long as it trades below it, weak sentiment is likely to continue, and it may slip to 44,100-43,800. Conversely, a new uptrend is possible only after the break of 44,750 and it may rise to 45,000-45,200.
The upside risk to domestic inflation may recede with the return of a good monsoon in September. This, in turn, could provide the RBI with leeway to maintain a pause in the upcoming policy meeting next week.
