Sensex forms long bearish candle

Mumbai On Wednesday, the benchmark indices corrected sharply, where the 30-share benchmark index BSE Sensex was down by 677 points. Among sectors, all the major sectoral indices were traded in the red, but PSU Bank index shed the most, where it declined over 2.50 per cent.

Technically, after dismissal of 20-day SMA (Simple Moving Average) support levels, the selling pressure intensified. After a long time, the index closed below 20-day SMA and also formed long bearish candle on daily charts which is largely negative.

“We are of the view that, the 65,500 points would be the immediate support zone for the bulls. Above which, we could see one quick pullback rally till 66,000-66,100 levels,” says Shrikant Chauhan of Kotak Securities. On the flip side, fresh selling pressure is possible only after dismissal of 65,500 points. Below which, the index could slip till 65,300-65,200 levels. Vinod Nair, head (Research) at Geojit Financial Services says: “The Indian market witnessed a broad sectoral slide, affected by weak global market trends. Negative news regarding the US rating downgrade on fiscal concerns, coupled with weak factory activity data from Euro zone and China, led to widespread worries across the globe.” Additionally, prolonged FII selling, triggered by a rise in US bond yields, has disrupted the mood of the domestic market.