One Quick Pullback Rally Possible

Mumbai: The benchmark indices continued weak momentum as BSE Sensex was down by 241 points.Among sectors, Metal index outperformed, rallied over 1.80 per cent whereas IT index lost the most shed over two per cent. Technically, one more time market registered selling pressure at higher levels.

On daily charts, it has formed bearish candle and currently is tis comfortably trading below 200-day SMA (Simple Moving Average) which is largely negative. “We are of the view that, the current market texture is weak but oversold. Hence, we could expect one quick pullback rally from the current levels,” says Shrikant Chouhan, head (equity research), Kotak Securities.

For the day traders now, 76,950 would act as a key support zone. if market succeeds to trade above the same, then it could bounce back till 78,000. Further upside may also continue which could push the market till 78,200. On the flip side, fresh selloff possible only after dismissal of 76,950. Below which, it could slip till 76,500-76,400.

Prashanth Tapse, senior V-P (research), Mehta Equities, said: “Bearish sentiment continued to prevail as markets ended the choppy session on a weaker note for the 7th consecutive session led by weakness in IT, oil & gas and telecom stocks. However, optimism in banking, metals, auto and FMCG stocks helped benchmark indices come off its early lows. While Indian equity markets are seeing fund outflows for more than a month now, surging US bond yields and local earnings failing to meet the estimates has been causing uncertainty amongst the investors.”

The Indian stock market closed, on negative note as investors reacted to global cues and domestic economic data. The Sensex slipped 0.3 per cent to close at 77,339. Vaibhav Vidwani, Research Analyst, Bonanza, said: “The IT and pharma sectors faced pressure, with major stocks like Infosys and Dr. Reddy’s falling, reflecting ongoing concerns over global economic conditions and inflation pressures.”

Metal stocks were in green today because of bottoming out of metal prices attracted investors towards metal stocks. Banking and financial services stocks showed resilience, buoyed by positive quarterly results from key players in the sector.