Sensex forms Hammer candlestick
Weekly charts indicate further weakness from the current levels below 63,000; Below the same, the index could slip till 62,000, further down side may also continue, which could drag the index till 61,700; On the flip side, fresh uptrend rally possible only after dismissal of 63,000 above which, it could rally till 63,300-63,600
image for illustrative purpose
The benchmark index BSE Sensex witnessed volatile activity during the just-concluded week, after a roller coaster momentum and closed at 62,625 points. Among sectors, IT index lost the most, shed nearly 3.5 per cent, whereas buying interest continued on reality, infra and auto stocks.
Technically, after a promising uptrend rally, the index took the resistance near 63,325 and reversed sharply. In addition, on weekly charts, it has formed Hammer candlestick formation, which indicates further weakness from the current levels.
“We are of the view that, as long as the index is trading below 63,000level, the weak sentiment is likely to continue. Below the same, the index could slip till 20-day SMA (Simple Moving Average) or 62,000,” says Amol Athawale, deputy vice-president (technical analysis), Kotak Securities.
Further down side may also continue, which could drag the index till 61,700 points. On the flip side, fresh uptrend rally possible only after dismissal of 63,000pts, above which the market could rally till 63,300-63,600 points. About Bank Nifty: currently it is witnessing non-directional activity; perhaps traders are waiting for either side breakout. For the bulls now, 44,000 would be the immediate resistance zone, while 43,800 could act as a key support level. Above 44,000, the Bank Nifty could rally till 44,500, whereas below 43,800 the selling pressure is likely to accelerate. Below the same, it may retest the level of 43,500-43,300 points.
Vinod Nair, head (research) at Geojit Financial Services, says: “The domestic market witnessed extended selling pressure as investors eagerly awaited the domestic inflation data due on Monday as the RBI refrained from an aggressive cut in their inflation forecast. The market is hopeful that the CPI inflation for May will further moderate from its current level of 4.7 per cent. In addition to the domestic factors, global cues also failed to provide support, as the US reported high unemployment claims ahead of the release of the inflation figures and the Fed meeting.”
