Pullback formation is likely to continue

Mumbai: In the last week, the benchmark indices witnessed a volatile activity, after a roller coaster moment the Sensex was shed over 375 points. Among Sectors, FMCG, Oil & Gas and Pharma index gained over 1 per cent whereas profit booking were seen in PSU Banks , Private Banks and Media indices. PSU Bank index lost the most shed over 3 per cent.

During the week, the Sensex registered a fresh all time high of 71,913 but due to consistent profit booking at higher levels, it corrected sharply. From the weekly highest levels, the Sensex corrected over 1900 points.

After a sharp decline, it took the support near 70,000 and bounce back sharply. Technically, the short-term texture of the market is volatile hence; level based trading would be the ideal strategy for the day traders.

“We are of the view that, as long as the index is trading above 70,700 the pullback formation is likely to continue,” says Amol Athawale, Vice President - Technical Research, Kotak Securities. Above the same, the market could move up till 71,500-71,650. On the flip side, below 70,700 the sentiment could change. Below the same, the market could retest the level of 70,400-70,000.

For Bank Nifty, 47,000 could act as a sacrosanct support zone, above which it could rally till 48,000-48,300. However, below 47,000 uptrend would be vulnerable. Below which, it could slip till 46,700-46,500.

Prashanth Tapse, Senior VP (Research), Mehta Equities says, “Overnight gains in the US markets and a sharp upsurge in domestic IT stocks aided sentiment in local indices. Although markets were a bit wobbly, markets stayed in positive territory in the second half as other sectoral stocks from metal, oil & gas, auto and realty pack rallied behind the markets.