Sharp pullback rally likely in oversold market
On the backdrop of weak global cues, the benchmark indices corrected sharply. BSE Sensex was down by 906 points.
image for illustrative purpose
Mumbai: On the backdrop of weak global cues, the benchmark indices corrected sharply. BSE Sensex was down by 906 points. Among sectors, all the major sectoral indices were traded in the red, but Metal and Media indices drag over two per cent. Technically, after a gap-down opening the index intensified the selling pressure, the Sensex breaches the important support level of 60,500 and post breakdown the selling pressure were intensified.
The index has formed a long bearish candle on daily charts and lower top formation on intraday charts, which supports further weakness from the current levels.
“We are of the view that, the market texture is weak, but oversold. Hence, we could see a sharp pullback rally, if the index succeeds to trade above 59,900,” says Shirkant Chouhan, Head of Equity Research (Retail), Kotak Securities.
For the traders, now the 59,900 points would be the key level to watch out. Above 59,900 level, the pullback move will continue till 60,300-60,500. On the flip side, below 59,900 level, the index could slip till 59,700-59,600. Contra traders can take a long bet near 59,600 with strict 59,500 support stop loss.
