Short-term mkt texture remains sluggish

Mumbai: In the last session of a truncated week, the benchmark indices experienced extremely volatile activity. After a roller-coaster of movement, BSE Sensex was down by 205 points. Among sectors, Real Estate, Metal, and IT indices corrected sharply, with Real Estate down by four per cent, Metal by 2.9 per cent, and IT by 2.3 per cent. In contrast, the FMCG and Consumer indices outperformed, with both indices rallying over three per cent.

During the week, the market opened with a significant gap down and slipped below 72,700. However, due to buying interest at lower levels, there was a sharp rebound. Technically, on weekly charts, the index formed a long bullish candle, and on the daily chart, it exhibited a promising reversal formation, which is largely positive. However, the short-term texture of the market remains on the weak side.

Amol Athawale of Kotak Securities, said: “We believe that the current market texture is extremely volatile and uncertain; therefore, level-based trading would be the ideal strategy for positional traders.” In the near future, the 50-day and 20-day SMA (Simple Moving Average) or 75,800 would act as crucial resistance zones. On the downside, retracement support is positioned at 74,200. Technical setup indicates that as long as the market is trading above 74,200, the pullback formation is likely to continue. On the higher side, if 75,800 is breached, it could push the market toward 76,400. Conversely, if it falls below 74,200, market sentiment could shift negatively, and traders may prefer to exit their long positions.