Selling pressure at higher levels
image for illustrative purpose
Mumbai: The US Fed effect led to a massive sell-off in the markets as banking, IT, metal & realty stocks received severe pounding at the hands of investors. Markets were disappointed after the Fed indicated that the rate hike regime would continue next year, which further accentuated the already fragile market sentiment prompting investors to trim their equity exposure.
Technically, throughout the day the market witnessed selling pressure at higher levels. Lower top formation on daily charts and double top formation on intraday charts are indicating further down side from the current levels. In addition, long bearish candle on daily charts also supports short term weakness.
For traders now, 61,500-61,300 would be the immediate support levels, on the flip side, 20-day SMA (Simple Moving Average) or 62,350 could act as a crucial resistance zone.
"We are of the view that, as long as the index is trading below 62,350 the chances of hitting 61,300 would turn bright," says Shrikant Chouhan, head of Equity Research (Retail), Kotak Securities. For the bulls, pullback rally possible if the index succeeds to trade above 62,350 above the same, it could move up to 62,500-62,700.
Stock Picks
♦ SBIN: The stock has finally shown some weakness on charts. Today we have formed a Bearish Engine pattern on daily time frame and also have confirmed negative divergence. Stock can be short for target price of Rs576 with a Stop Loss at Rs624.
(Source-Kush Ghodasara)
