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Charts indicate short-term weakness

On Thursday, the benchmark indices witnessed selling pressure at higher levels. The BSE Sensex was down by 609 points. Due to weak global conditions the market opened with a gap down and consistently registered selling pressure at higher levels.

Sensex forms long bullish candle
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Sensex forms long bullish candle

Mumbai: On Thursday, the benchmark indices witnessed selling pressure at higher levels. The BSE Sensex was down by 609 points. Due to weak global conditions the market opened with a gap down and consistently registered selling pressure at higher levels. Among Sectors, IT and Reality indices lost the most, shed nearly 1.5 per cent while some buying interest was seen in selective Banking and Auto stocks.

Technically, after an intraday sharp fall the market took the support near 59,300 and reversed, but failed to surpassed 59,800 resistance level which is broadly negative.

"In addition, on daily charts, the index has formed Hammer kind of candlestick formation that also support short term weakness. The texture of the market is volatile and remain volatile in the near future. Hence, level-based trading would be the ideal strategy for the day traders. Now, 59,000 would act as an immediate support level for the bulls," says Shrikant Chouhan, head (equity research-retail), Kotak Securities.

Above the same uptrend move will continue up to 59,800-60,000. On the flip side, trading below 59,000 could drag the index up to 58,800-58,600, he added. On the other side, trading dismissal of 59,900 could possibly open correction wave till 59,700-59,500, he said. Contra traders, can take contra bet near 60,500 with strict 60,650 resistance stop loss, he added.

Kumud Das
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