Media, IT stocks may shine

A bullish trend reversal is seen in Benchmark Index with the current price action engulfing and absorbing the bearish price action since May 11. A bullish trend reversal indicates if the lower levels of 15,800 – 15,780 are held or sustained, we may see a short-term up move that can test highs of 17,100 – 17,150 in the next few weeks.

This reading is as per noiseless charts. The break of 15,800 - 15780 would negate this view and we stand for a deeper cut towards 15,000 – 14,900. The market has absorbed a lot of negativity or rather every bad news in its price structure since October which earlier seemed to be a pause in an uptrend while now it's more of a due correction. It has priced in geopolitical tensions between Russia and the West, the inflation, the supply-side concerns due to the lockdown in China, and the inflation at record highs.

In short term, media and IT stocks are expected to improve and sustain their recent lows while auto and finance may lead the sectors in terms of outperformance. realty, metal, PSU bank, and consumer durables will continue to lag.

(The author is Technical Analyst at Finversify and is a CMT, CFTe)