Range-bound trading in near future

For the day traders now, buying on intraday corrections and sell on rallies would be the ideal strategy. For traders, the 71,700-71,500 would act as a key supports zones, while 72,200 and 72,350 could be the immediate resistance areas

Mumbai: On Monday, the benchmark indices witnessed strong uptrend rally as BSE Sensex was up by 1,241 points. Among sectors, almost all the major sectoral indices witnessed buying interest at lower levels, but Energy, Oil and Gas indices outperformed, both the indices rallied over five per cent. Technically, after a gap-up opening market successfully cleared the short-term resistance of 71,500 and post breakout it intensified positive momentum. On daily charts, it has formed long bullish candle, which indicating further uptrend from the current levels.

“We are of the view that, the current market texture is bullish, but due to temporary overbought conditions, we could see some range-bound action in the near future,” says Shrikant Chouhan, head (equity research), Kotak Securities.

For the day traders now, buying on intraday corrections and sell on rallies would be the ideal strategy. For traders, the 71,700-71,500 would act as a key supports zones, while 72,200 and 72,350 could be the immediate resistance areas.

Prashanth Tapse, senior V-P (research), Mehta Equities, says: “Firm global cues lifted the domestic market sentiment, as the broad-based rally pushed benchmark Sensex above the psychological 72,000-mark towards the closing stages.”

After last week’s major sell-off triggered by FII selling, further short covering coupled with recovery in global indices aided renewed optimism in the markets today. While markets could be choppy ahead of the interim budget later this week and credit policy announcement thereafter, any flare up in the conflict in the Red Sea and simmering tensions in West Asia can fuel volatility.

Manish Jain, head (fund management), Centrum says: “Indian equity markets rose sharply on Monday on the back of great expectations from the upcoming Budget and strong cue from other Asian markets. Private sector banks in particular have driven the market rally as DIIs continue value picking at current levels.”

We believe that the volatility will continue in the coming days as the results season unfolds. The market will also be keenly looking at the upcoming FED meet to see any change in body language, inflation expectations and rate cut cues, he said.