Level based trading would be ideal strategy

MUMBAI In this week, benchmark indices witnessed profit booking at higher levels, where the 30-share BSE Sensex was down by 439 points.Among sectors, despite weak market sentiment, IT and digital indices rallied over 3 per cent, whereas Reality and PSU Bank indices were top losers, both the indices shedding over 4 percent.

Technically, after a long time, the index closed below 20-day SMA (Simple Moving Average) and it also holding lower top formation on daily charts, which is largely negative. “We are of the view that, the short-term market texture indicates weakness, but we could see a promising pullback rally, if the index succeeds to trade above 65,300 points. Above 65,300points, the index could move up till 67,000 pointsor 20 day SMA,” says Amol Athawale of Kotak Securities.Further upside may also continue, which could lift the market till 67,200 points.On the flip side, below 65,300 points,the selling pressure is likely to accelerate.Below which, the index could slip till 65,000-64,900.

The current market texture is volatile; hence, level based trading would be the ideal strategy for the short-term traders. After a sharp correction, the Bank Nifty took the support near 50-day SMA and bounced back sharply. For the traders now, 50-day SMA or 44,500 points would be the sacrosanct support-level. Above which, it could rally till 20-day SMA or 45400-45500. On the flip side, below 44500 points,uptrend would be vulnerable. Below the same, it could retest the level of 44300-44000.