Short-term market shifts to positive from negative
For traders, 59,000 could be an important level, above 59,000, it can can accelerate to level of 59,750-59,900; on other hand, an uptrend below 58,850 would be weak
Profit booking possible at higher levels
Mumbai: A stellar rally was witnessed in benchmark indices on Tuesday, with the Sensex witnessing a rise of 1564 points. Among sectors, all major sectoral indices were trading in the green, but banking and financial and realty stocks were the biggest gainers. Financial and reality indexes rose 3.5 per cent.
Technically, after opening the gap, the index successfully cleared the 17525 resistance level and after a breakout, it accelerated the positive momentum. On the daily chart, it has formed a long bullish candlestick structure, which is largely positive. Moreover, the index again successfully crossed the barrier of the 20-day SMA (Simple Moving Average) level and managed to close above the same. The index rose over 2,200 points in the last two days.
"We are of the view that the short-term market structure has changed from negative to positive due to a strong pullback from lower levels which happens generally on the last day of the monthly close, but due to temporarily overbought conditions, we may see range-bound activity in the near future," says Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
For traders, now the 59,000 or the 20-day SMA could be an important level to notice. Above 59,000, the index can accelerate to the level of 59,750-59,900. On the other hand, an uptrend below 58,850 would be weak. If the Sensex crosses the 60,050 level then it will take the indices to the 60,900-61,000 level without any major effort.
Stock Picks
AMBUJACEM: Stock has consolidated above Rs400 level since last 8 days. On Tuesday stock has closed above 5 day average with heavy volumes. Stock can be bought for Target of Rs432, SL Rs401.
(Source-Kotak Securities)
