Buy on intraday corrections and sell on rallies

Mumbai, Dec 05: On Monday, the benchmark indices witnessed a stellar rally. The Sensex was up by 1371 points. All major sectoral indices traded in the positive territory, but the PSU Bank, Metal, and Energy indices outperformed and rallied over 2%. Technically, after a gap-up opening, the market held a positive momentum throughout the day.

The Sensex registered a fresh all-time high of 68,918.20. Additionally, a bullish candle was formed on daily charts, which supports a further uptrend from the current levels. For trend-following traders, 68,200 would act as a sacrosanct support zone as long as the index is trading above it. This would likely continue the uptrend formation on the higher side, and the index could continue the rally till 69,000-69,300. On the flip side, below the 20500/68,200, the uptrend would be vulnerable. We believe that the current market texture is bullish.

“However, for day traders, buying on intraday corrections and selling on rallies would be the ideal strategy. Be stock-specific for the time being,” says Shrikant Chouhan – Head Equity Research, Kitak Securities.

The Bank Nifty has crossed an all-time high of 46,400, which is a big positive for the index. It could help the index move higher towards the level of 48,00, with major resistance at 47,000. Support would be at 46000 and 45800. Buying on dips is a prudent strategy.