Index forms long bullish candle on daily charts

Investors need to keep close watch on the rising Covid-19 cases tally in recent time as there might be 3rd wave in coming days. We advise investors to keep adequate liquidity in coming days

Mumbai: The benchmark indices bounce back sharply, BSE Sensex was up by 750 points. After an early morning selling pressure one more time the Sensex held the level of 56,900 and recovered sharply. From the day lowest level, the Sensex rallied over 1,100 points. Among sectors, strong buying was seen in IT, Energy and Auto stocks whereas Reality and Selective FMCG stocks witnessed technical selloff.

Technically, the index took the support near 200-day SMA or 56,900 and reversed quickly. It also formed long bullish candle on daily charts which is broadly positive.

"For the trend following traders, now 50-day SMA or 57,600 would act as a trend decider level," says Shrikant Chauhan, head of equity research (Retail), Kotak Securities.

Above the same, the uptrend wave will continue till 58,300-58,500. On the flip side, below 57,600 uptrend would be vulnerable, he said.

"We witnessed good rebound in markets driven by buying in Reliance and HDFC. Market recovery after the morning fall is a good sign for Indian market. In coming days, we still expect volatility to persist till the war situation between Russia and Ukraine and crude price stabilize. Investors need to keep close watch on the rising Covid-19 cases tally in recent time as we might see 3rd wave in coming days. We advise investors to keep adequate liquidity in coming days," said, Rahul Sharma, Equity 99.