Short-term texture turns positive
Sensex formed a Double Bottom formation near 200-day SMA
image for illustrative purpose
Mumbai: In the last week, the benchmark indices witnessed volatile action, after a roller-coaster activity on last Friday as BSE Sensex bounced back sharply. On the weekly basis, the Nifty ends 0.72 per cent up points higher, while BSE Sensex closed at 59,808 points.
Among sectors, PSU Banks and Reality indices gained the most, PSU Banks gained 8.74 and Reality 7.7 per cent, whereas profit booking continued in IT and Pharma stocks, as a result IT index shed over 2.5, while Pharma index corrected over 1.5 per cent. Technically, the index has formed a Double Bottom formation near 200-day SMA (Simple Moving Average) and bounced back sharply. It also formed promising bullish candle on daily and weekly charts which supports further uptrend from the current levels.
“We are of the view that, the short-term texture of the market has changed to positive from negative and as long as the index is trading above 59,200 uptrend wave is likely to continue,” says Amol Athawale, deputy V-P (technical analyst), Kotak Securities.
Meanwhile, the Bank Nifty successfully cleared the 20-day SMA mark, which is broadly positive. For the Bank Nifty, the 41,000 or 20-day SMA could be the immediate support zone. Above which, it could move till 41,700-42,300.
For Sensex, buying on intraday correction and sell on rallies would be the ideal strategy. For short-term traders, the 59,600-59,300 immediate support zone, while 60,000-60,300 would act as a crucial resistance.
- Shree Renuka Sugars: This stock is making classic Cup and Saucer pattern, which indicates strong upward move is awaited in near term. As prices have consolidated, corrected, recovered at the same time. Break above Rs45 (current price) could lead prices towards Rs50 or higher levels. As long as Rs39 on downside is seen protected
- Nykaa: The stock is witnessing U-shaped recovery since past few sessions awaiting a breakout at 150 levels. Move above 150 on closing basis could take prices towards Rs160 level as long as Rs145 crucial support levels remain intact on downside.
(Source- Ravi Gangan, Technical Trader, Mehta Equities)
