Buy on dips, sell on rallies is the ideal strategy

Mumbai: In the last session of the week, the benchmark indices continued positive momentum, the Sensex was up by 650 points. Among Sectors, Metal index outperformed, rallied 3 per cent whereas Reality index shed over 1 per cent.

During the week, market comfortably trade above 20 day SMA (simple Moving Average) which is largely positive. In addition, on daily and intraday charts it is holding higher high and higher low series formation, which supports further uptrend from the current levels.

Amol Athawale, VP-Technical Research, Kotak Securities, said: “We are of the view that, the short-term market texture is positive but due to temporary overbought conditions we could see range bound activity in the near future.” Hence, for traders now, buying on dips and sell on rallies would be the ideal strategy, he said. Technically, 80,800 and 20 day SMA or 80,300 would be the key supports zones while 81,500-81,900 could act as crucial resistance areas for the traders. However, below 20 day SMA or 80,300 uptrend would be vulnerable.

For Bank Nifty 20 day SMA or 50,700 would be the immediate reference point for the bulls. As long as it is trading above the same, the bullish sentiment is likely to continue. On the higher side, it could move up till 50 day SMA or 51,500.Further upside may also continue which could lift the index till 51800. On the flip side, below 50,700 it could retest the level of 50,250-50,000. Prashanth Tapse, Senior VP (Research), Mehta Equities, said: “Markets ended flat in a listless trading as investors resorted to caution ahead of the US Fed chair’s Jackson Hole meeting outcome. Investors are hoping that the US Fed could give some sense on when will the immediate rate cut will happen on the back of moderating inflation and subdued job data.” The Indian stock market closed on a flat note, with both the BSE Sensex and Nifty 50 recording minor gains.

Vaibhav Vidwani, Research Analyst, Bonanza Portfolio, said: “The market was supported by favorable global cues like Federal Reserve Chair Jerome Powell’s address, looking for confirmation regarding a potential U.S. rate cut in September and optimistic investor sentiment.” In the meantime, more locally focused small- and mid-cap companies barely showed any changes.