Current texture is weak and oversold

Mumbai: On Monday, the benchmark indices corrected sharply, BSE Sensex closed at 56,580 points. Due to weak global market conditions, the market opened with a gap down and held the negative stance throughout the day. Among sectors, almost all the major sectoral indices were traded in the red, but Nifty Reality index lost the most, shed over 3.5 per cent.

Technically, post gap down, the index has formed bearish candle and it also holding lower top formation on intraday charts which broadly negative. In addition, the nifty comfortably trading below 50 and 200 day SMA that also support further weakness form the current levels.

"We are of the view that, the texture of the market is weak and oversold. For the bulls, 56,800 would be the key level to watch out. Above which, we could expect a fresh pullback rally till 57,100-57,300," says Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.

On the flip side, below 56,800 the index is likely to retest the level of 56,300-56,10, he added.

Indices are trading down, with the Sensex dropping 650 points; RIL, Infosys, and Bajaj Finance among the main negative contributors. We saw a downward movement in Capital goods, FMCG, healthcare, IT, power, metal, oil & gas, and realty sector. As a result of the global sell-off prompted by aggressive US Fed tightening and China Covid worries, Indian equities indices opened in the negative and stayed in the same zone for a whole day.

Harsh Parekh, Technical Analyst, Bonanza Portfolio, says that Indian bourses opened in red following weak trade in Asian market peers as global sell-off triggered by aggressive US Fed tightening. Except bank, all other sectoral indices ended in the red with auto, capital goods, FMCG, healthcare, IT, power, metal, oil & gas, realty down 1-4 percent. The benchmark index closed at 56,579 respectively.