We may see range-bound activity in near future

Mumbai, Jul 08: Benchmark indices continued the positive momentum last week, Nifty closed 1.25 per cent up after a promising uptrend rally while Sensex was up over 1350 points.

Sectorally, almost all major sectoral indices were trading in the positive zone, but the IT index outperformed, gaining over 4 per cent. During the week, Sensex recorded a new all-time high of 80,392.64, but due to some profit booking at higher levels, it gave up some gains.

“Technically, on the weekly chart the index has formed a bullish candle on the intraday chart, it is still maintaining higher high and higher low series formation, which is largely positive. We believe that the larger structure of the market is still positive, but we may see range-bound activity in the near future due to temporary overbought conditions,” says Shrikant Chouhan – Head – Equity Research, Kotak Securities.

For traders, 79,300 and 79,000 would act as key support zones while 80,400-81,000 may act as a crucial resistance zone. However, crossing 81,000 could result in unwinding of short-sell positions and it may move towards 82,200. Below 79,000 traders may prefer to exit long positions.

For Bank Nifty, 52,000 will be the sacrosanct support level. As long as it is trading above the same, the bullish sentiment is likely to continue. On the higher side, 53,750-54,000 could be the immediate resistance zones for trade.