Market pattern indicates a consolidation phase
The benchmark indices sharply declined today, Sensex down by 4390 points. Most major sectoral indices experienced profit booking at higher levels, with the PSU Bank and Energy indices recording significant falls at 14.50% and 11.8%, respectively
image for illustrative purpose
Mumbai, June 4: The benchmark indices sharply declined today, Sensex down by 4390 points. Most major sectoral indices experienced profit booking at higher levels, with the PSU Bank and Energy indices recording significant falls at 14.50% and 11.8%, respectively.
From a technical standpoint, following a sharp sell-off on Tuesday, the market broke the crucial support of the 20-day Simple Moving Average (SMA). Subsequently, selling pressure increased after the breakdown, and the index formed a long bearish candle on the daily chart while trading below short-term and medium-term averages.
“The current market pattern indicates a consolidation phase within a broader trading range It is advisable to consider taking a contra view of going short or long around given levels Resistance is expected around the 50 and 20-day SMAs Gradually reduce long positions at each resistance level,” says Shrikant Chouhan, Head Equity Research, Kotak Securities.
In dramatic downturn, falling 6%, as bears took control of Dalal Street following the BJP's failure to secure a clear majority in the elections. The Narendra Modi-led BJP leads with 293 seats, but concerns over the new government's ability to implement bold policies weighed heavily on the market.
“Market remains subdued despite Modi's victory speech, with technical indicators Meanwhile, WTI crude oil futures dropped to a four-month low, offering some relief Eyes are now on the RBI's three-day MPC meeting,” says Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd. Preferred trades: Bearish on Dixon Technologies, CUB, and Exide.
