Sensex in Double Top formation

Mumbai: On Tuesday, the benchmark indices witnessed a profit booking at higher levels as BSE Sensex was down by 379 points. Among sectors, Pharma index was the top gainer, rallied over two per cent whereas Auto and private bank indices corrected over one per cent.

Technically, on daily charts, the index has formed a bearish candle and on intraday charts, it has formed Double Top formation, which is largely negative. “For the traders now, 72,300 would act as a key level to watch out. Above the same, the market could rally till 72,500-72,650,” says Shrikant Chouhan – Head Equity Research, Kotak Securities. On the flip side, below 72,300 weak sentiment is likely to continue. Below which, the market could continue the correction formation till 71,600-71,450.

Prashanth Tapse, senior V-P (research), Mehta Equities says: “Profit taking in banking, IT, auto and realty stocks took a toll on the markets, as expensive valuations prompted investors to pare their holdings. Besides, the ongoing conflict in the Red Sea has been making investors jittery as any flare up in violence could trigger upsurge in oil prices and weigh on the economy.”

The biggest negative catalyst: Covid-19 sub-variant JN.1 cases have seen a surge throughout India. Strictly speaking, if last two days trading action on Dalal Street is any indication then volatility could be seen going ahead.