Pullback formation may continue

Mumbai: On Thursday, the benchmark indices bounced back sharply as NSE Nifty ended 105 points higher, while BSE Sensex was up by 359 points. Among sectors, all the major sectoral indices witnessed buying interest at lower levels but Media index outperformed, rallied over 2.5 per cent.

Technically, after a weak opening, the index took the support near 69,900 and bounced back sharply. From the day lowest points, the market rallied nearly 1,000 points. A bullish candle on daily charts and intraday reversal formation supports further uptrend from the current levels. “We are of the view that, as long as the market is trading above 70,600 the pullback formation is likely to continue. Above which, the market could rally till 71,200-71,350,” says Shrikant Chouhan, head (equity research), Kotak Securities. On the flip side, below 70,600 points, the selling pressure is likely to accelerate. Below the same, the market could retest the level of 70,000 points. The current market texture is volatile. Hence, level-based trading would be the ideal strategy for the day traders.

Prashanth Tapse, senior V-P (research), Mehta Equities, says: “Market witnessed a roller-coaster ride, as key indices plunged in early trades only to recoup their lost ground and end sharply higher.” Earlier, weak European and Asian indices weighed on sentiment, but India’s strong growth story prospects gives investors the comfort to place long-term bullish bets.