Level based trading strategy for day traders
60,870 would be trend decider level for now, above which, the index could move up to 60,400-60,500; on flip side, quick intraday correction is not ruled out below 60,870
Mumbai: The benchmark indices continued positive momentum fourth day in a row, the BSE Sensex was up by 375 points. Among Sectors, Metal and Pharma indices outperformed whereas intraday profit booking was seen in selective PSU Banks stocks.
Technically, after promising 60,500 breakout last Tuesday, the market opened with a gap up and after strong opening the entire day it was hovering between 60,870-61,280. In addition, on daily charts the index has formed Doji candlestick formation which indicates indecisiveness between the bulls and bears. However, the medium term texture of the market is still on the positive side.
"For the trend following traders now, 60,870 would be the trend decider level. Above the same, the index could move up to 60,400-60,500," says Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
On the flip side, quick intraday correction is not ruled out, if the index succeeds to trade below 60,870. Below the same, the index is likely to touch 60,500-60,400. The short term texture of the market is mildly overbought, hence level based trading would be the ideal strategy for the day traders.