Higher bottom formation indicates further rise
Possible range-bound activity in the near future due to temporary overbought condition; For traders now, 57 800-57,600 would be key support zone whereas 58,300-58,400 would act as an important resistance zone
image for illustrative purpose
Mumbai: On the backdrop of strong global cues, the benchmark indices bounce back sharply. The BSE Sensex was up by 1,276 points. Among sectors, all the major sectoral indices were traded in the green but Metal and Private Bank indices outperformed, both indices rallied over 3 per cent.
Technically, after a sharp intraday correction the index bounced back sharply. Post gap-up opening it held the level of 57,500 and succeeded to close above the same. It also formed higher bottom formation on intraday charts which indicating continuation of uptrend in the near future. "The short-term market structure is positive, but due to temporary overbought condition we could see range-bound activity in the near future," says range bound activity in the near future.
For the traders now, 57 800-57,600 would be the key support zone whereas 58,300-58,400 would act as an important resistance zone for the index.
Buying on intraday correction and sell on rallies would be the ideal strategy for the day traders.
Stock Picks
TITAN: Stock is resisting near its 10 day average and its seems Tuesdays high was a completion of corrective wave B. Stock can be short positioned for targets of Rs2570/2542 with stop loss on future at Rs2628
Tata Motors: Stock has completed corrective pattern FLAT with A-B-C formation at Rs411 on futures on Tuesday. We can expect a new downfall with stop loss of Rs412 for targets of Rs401/389 in coming week
(Source: Kush Ghodasara)
