Non-directional trading may continue

Mumbai: The benchmark indices witnessed lackluster activity during the last week. BSE Sensex closed at 65,970 points. Among sectors, Reality and Metal indices rallied over one per cent whereas PSU Bank and Digital indices shed over one per cent.

Technically, after a promising uptrend rally the market is witnessing range-bound activity at higher levels. On the lower, side the index consistently taking support near 65,500 points, while witnessed profit booking near 66,250 level.

“In addition, on weekly charts, the index has formed a small candle that also suggesting non-directional activity is likely to continue in the near future. For the trend following traders now, 66,250 would act as a fresh breakout level, above the same the market could rally till 66,500-66,800 points,” said Amol Athawale, vice-president (technical research), Kotak Securities.

On the flip side, below 66,250 we could see one quick intraday correction till 65,500-65,400 points. Contra traders can take a long bet near 65,400 with strict 100 points stop loss. For Bank Nifty, near 200-day SMA (Simple Moving Average) or 43,350 it has formed reversal formation, which supports further uptrend from the current levels.

Technically, as long as it is trading above the same, the positive sentiment is likely to continue. Above which, it could move up till 50-day SMA or 44,050pts. Further upside may also continue which could lift the index till 44,300pts. On the other side, below 43,350 level, the uptrend would be vulnerable.