Market may weaken further in the short-term
In the near future 55,925 would act as a key resistance level for the traders, below which the index could retest the 54,900-54,700; the larger texture of the market is still in to the positive side, hence Contra traders can take a long bet near 54,700 with strict 54,550 support stop loss
image for illustrative purpose
Mumbai: The benchmark indices witnessed profit booking at higher levels, the Sensex was down by 407 points. Among sectors, Reality and Media continued the positive momentum whereas Banking and Energy stocks registered profit booking at higher levels.
Technically, on last Thursday the market opened with a gap down and recovered sharply but one more time it took the resistance near 55,925 and due to profit booking at higher levels corrected sharply.
A double top formation on intraday charts and Doji candlestick formation on daily charts indicating further weakness form the current levels. "We are of the view that, in the near future 55,925 would act as a key resistance level for the traders. Below which the index could retest the 54,900-54,700," says Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
On the flip side, fresh uptrend rally possible only after 55,925 range breakout. Above which it could move up to 56,200. The larger texture of the market is still in to the positive side, Hence, Contra traders can take a long bet near 54,700 with strict 54,550 support stop loss.
