Speculative buying lifts mkts higher
Technically, Sensex still holds higher high and higher low formation and trading above 20 day SMA; on weekly charts, it has formed bullish candle, supporting further uptrend
image for illustrative purpose
In the last week, the benchmark indices continued the positive momentum, BSE Sensex was up by 466 points. Among sectors, bank, metal and pharma stocks outperformed, whereas IT stocks witnessed selling pressure at higher levels.
Technically, the index is still holding higher high and higher low formation and currently it is comfortably trading above 20-day SMA (Simple Moving Average), which is broadly positive. In addition, on weekly charts, it has formed bullish candle, that also support further uptrend from the current levels.
“We are of the view that, the market texture is bullish and for the trend following traders now, 62,850pts would be the key level to watch out. Above the same, the index could move up till 63,600pts. Further upside may also continue, which could lift the market up to 64,000pts,” says Amol Athawale, Deputy Vice President - Technical Analyst, Kotak Securities.
On the other side, below 62,850pts or 20 day SMA, uptrend would be vulnerable. Below which the market could slip till 62,550-62,350 level. For Bank Nifty, as long it is trading below 20 day SMA or below 44,000pts the weak sentiment is likely to continue. Below the same, it could slip till 50 day SMA or 43,250pts. On the flip side, fresh uptrend rally possible only after dismissal of 44,000pts. Above 44,000pts, it could retest the level of 44,300. The domestic market rebounded with strong buying in banking, pharma, and consumer stocks, along with positive cues from global markets.
Vinod Nair, head (research), Geojit Financial Services, said: “The US market’s optimism was bolstered by better-than-expected retail sales, reflecting the robustness of the economy. Furthermore, jobless claims remain elevated and a decline in import prices raised hopes for a prolonged pause in interest rate hikes by the Fed, contradicting their announcement of potential future rate hikes made the previous day.”
Indian equity markets continued to rise along with a rally in the global markets. BSE Sensex 30 gained one per cent this week. Majority of the sectors posted positive returns with some sectoral indices making a fresh 52 week high. BSE Realty, BSE Metals, BSE Healthcare and BSE FMCG indices were amongst the top performers this week. Shrikant Chouhan, head (equities research-retail), Kotak Securities, said: “Globally markets reacted to the US Fed meeting outcome. In its latest meeting, the US Fed announced a pause in interest rate hikes, while suggesting that some further increases in rates may be required in 2023 to bring inflation below 2 per cent over time.”
The ECB raised their benchmark policy rate by 25 basis points and indicated further policy tightening. On the domestic economy front, May CPI inflation at 4.25 per cent surprised on the downside and the trade deficit in May widened from April 2023 levels.
