Buy on dips, sell on rallies
Selling pressure could accelerate if Sensex slips below 60,600
image for illustrative purpose
Mumbai: In the last week, the benchmark indices witnessed volatile activity and after a roller coaster momentum, the Sensex closed at 61002. Among sectors, some buying was seen in infra, commodities stocks whereas reality and PSU banks stocks corrected sharply. Both the indices shed nearly 3 per cent.
During the week, after a weak opening, the index took the support near 60,800 and reversed sharply.
The Sensex cleared the short term resistance of 20 day SMA at 60,900. After a strong uptrend rally, Sensex closed at 61,900.
"Technically, the short term structure of the market is bullish but mildly overbought," says Shrikant Chouhan of Kotak Securities.
Hence, for short term traders buying on ‘dips and sell on rallies’ could be the ideal strategy. For the bulls now, 60,900-60,600 or 20 20 day SMA would act as a key support zone while 50 day SMA or 61,900 and 62,300 could be the immediate hurdle.
On the flip side, the selling pressure could accelerate if the index slip below 60,600, below which chances of hitting 60,300-60,200 would turn bright.
