Sensex forms lower high, lower low
Now, the 57,000 would act as an immediate resistance zone, below which, correction is likely to continue till 56,200-56,000; on flip side, short recovery rally possible only after dismissal of 57,000
image for illustrative purpose
Mumbai: The benchmark indices continued profit booking at higher levels, NSE Nifty ends 148 points lower, while BSE Sensex was down by 509 points. Among sectors, metal and banking stocks lost the most, both indices shed over 1.5 per cent. Whereas some buying was seen in selective Pharma and IT stocks. Technically, after a long time the market succeed to close below 200 day SMA (Simple Moving Average) and also held the lower high lower low formation on intraday charts which is broadly negative.
"We are of the view that, now 57,000 would act as an immediate resistance zone. Below which, the correction continuation wave is likely to continue till 56,200-56,000. On the flip side, short recovery rally possible only after dismissal of 57,000," says Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
Sensex is having major support between 62,00-56,000 (which is important retracement support level). Buying is advisable in index heavyweight stocks if Sensex falls to 56,200 levels.
