Sensex holds lower high formation on intraday charts

Mumbai: The benchmark indices witnessed a sharp price correction. BSE Sensex was down by 412 points. On Tuesday post gap-down opening, index broke the 58,876 import support level, which is previous week lowest level and succeed to close blow the same that is largely negative. Among sectors Reality and Metal indices lost the most, shed over 2.5 per cent whereas banking stocks recovered sharply from the day lowest levels. Technically, after a long time BSE Sensex closed below 10-day SMA and it also holding lower high formation on intraday charts.

"We are of the view that, the broader market texture is still in to the weak side and fresh uptrend rally possible only after 58,800 breakout. Below the same we could see further weakness till 58,200-58,000," says Shrikant Chouhan, head (equity research-retail), Kotak Securities. On the flip side, if the index succeeds to trade 58,800 then it will move up to 59,100 and 59,400. The market texture is volatile hence level based trading would be the ideal strategy for the traders.

"Market is under pressure on account of inflation worries ahead of US inflation data release. Even March CPI inflation is set to increase to 6.37 per cent from 6.07 per cent in February," said Rahul Sharma of Equity 99. Along with this RBI hawkish turn at its policy review on April 8 and few sectors expected to have an adverse effect in their quarterly results due to commodity price rise and inflation, have put added pressure on the market, he added.

Benchmark index corrected almost 0.5 per cent. TMid and Small caps were also seen under pressure today. Investors are advised to maintain liquid cash in hand to take advantage of any falls in quality stocks due to poor performance in quarterly results.