Sensex forms bearish candle on daily charts
61,450 could act as key resistance zone and as long as the index is trading below this, correction wave is likely to continue till 59,900-59,700; On the flip side, above 61,450 it could move up to 61,800-62,000
image for illustrative purpose
Mumbai: Weakness in Asian and European indices triggered a sell-off in domestic equities. Valuations too are looking stretched, which is why local traders are using the opportunity to book some profits. Also, a few Fed officials have said that, rate hikes will not stop till the inflation is under control, making investors nervy about the growth prospects going ahead.
Technically, after a long time, the index succeed to close below 10-day SMA (Simple Moving Average) and it also formed bearish candle on daily charts, which is largely negative. "We are of the view that, 61,450 would act as key resistance zone for the market and as long as the index is trading below the same, the correction wave is likely to continue, the index could retest 59,900-59,700," says Shrikant chouhan, Head of Equity Research ( Retail), Kotak Securities.
On the flip side, above 61,450, the index could move up to 61,800-62,000. Contra traders can take contra bet near 59,700 with strict stop loss support at 59,500.
