Pullback rally likely
image for illustrative purpose
On Wednesday, the benchmark indices exhibited an intraday recovery after initially declining. Sensex rose by 173 points. Pharma and healthcare indices saw gains of over one per cent each, but select banking and financial stocks witnessed some profit-booking at higher levels.
Technically speaking, the index corrected itself in the morning and ultimately found support near 65,550, reversing sharply.
“On the daily chart, the index formed a bullish reversal formation near the 50-day Simple Moving Average (SMA), indicating a robust pullback rally from current levels. For traders, 65,900 would serve as a critical support level. If the market climbs above a particular levels, it could continue its positive momentum until 66,450-66,750. However, if it falls below 65,550, the market may decline to 65,400-64,100,” says Shrikant Chouhan of Kotak Securities.
For the Bank Nifty, the 44,750 is a significant obstacle. If it rises above 44,750, it could ascend to 44,900-45000 in the near term. However, if it falls below 44,100, it could gradually decline to 44,000 and 43,800. The Nifty IT index managed to stay above 32400, which could elevate the index to 32,700 and 33,000.
The advisable strategy is to buy on dips.
