Last week, market benchmarks experienced notable volatility, culminating in the Nifty closing 0.55% lower and the Sensex shedding more than 375 points, as described by Amol Athawale, Vice President of Technical Research at Kotak Securities.
While sectors like FMCG, oil & gas, and pharma demonstrated gains of over 1%, profit booking activities were evident in PSU banks, private banks, and media indices. The PSU Bank index suffered the most, declining by over 3%.
Athawale highlighted the market's trajectory during the week, noting that although the Nifty/Sensex reached new all-time highs of 21,593 and 71,913 respectively, consistent profit booking led to a significant correction. From these peak levels, the Nifty/Sensex corrected by over 600 and 1,900 points respectively. However, after this sharp decline, it found support around 21,000/70,000 levels and rebounded strongly.
From a technical perspective, Athawale suggests that the short-term market outlook remains volatile, advocating a level-based trading strategy for day traders. As long as the index maintains levels above 21,200/70,700, a continuation of the pullback pattern is anticipated. A breach above these levels could propel the market upwards to around 21,500-21,550 for Nifty and 71,500-71,650 for Sensex.
On the downside, if the index falls below 21,200/70,700, it might signal a shift in sentiment. This could potentially lead to a retest of levels around 21,100-21,000 for Nifty and 70,400-70,000 for Sensex.
Regarding the Bank Nifty, Athawale identifies 47,000 as a crucial support zone. A sustained position above this level might trigger a rally towards 48,000-48,300. Conversely, if the index dips below 47,000, the upward trend could be at risk, potentially causing a decline to 46,700-46,500 levels.
(With Agency Inputs)
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