Quote on Market Morning inputs by Shrikant Chouhan, Head Equity Research, Kotak Securities
Below the Quote on Market Morning inputs by Shrikant Chouhan, Head Equity Research, Kotak Securities
Benchmark indices experienced profit booking at higher levels last week, with Nifty closing up 0.8 per cent and Sensex rising by 660 points. Among sectors, the IT index outperformed, gaining 6.4 per cent, while the tourism and media indices declined by over 2 per cent. During the week, the market maintained its positive momentum but corrected sharply last Friday.
Technically, Nifty and Sensex broke the support zone of 24150/79400 and fell below the 200-day SMA (simple moving average). Additionally, a reversal formation on the daily chart and a shooting star candlestick formation on the weekly chart suggest temporary weakness.
We believe the correction wave will likely persist as long as the market is trading below 24150/79400. On the downside, the market may slide to 23800-23750/78500-78400, and a close below the same may push the index down to 23500-23350/77650-77200. Conversely, a move above 24150/79400 could shift market sentiment and may rise to 24400-24900/80300-81800.
The market is correcting to the exceptional rally that we witnessed from the lows of 21750/73150; however, a close below 23750 would result in further weakness in the near term. Our strategy should be to buy if the Nifty forms a reversal formation after hitting the level of 23750; otherwise, take a contra call between the 23500-23350 levels. Crossing the level of 24400 levels would result in 24900 levels.
For Bank Nifty, 55000 would be the trend-determining level for short-term traders. Below this level, it may retest the 54000-53500 range. Conversely, if it moves above 55000, sentiment may improve, increasing the chances of reaching 55500-56000.
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