Sensex forms long bearish candle

Mumbai: On the day of weekly expiry, the benchmark indices witnessed sharp price correction, BSE Sensex was down by 1,120 points. Among sectors, all the major sectoral indices were traded in the red but sharp cut was seen PSU Banks, Metal and private banks stocks. Amid all sectoral indices, PSU Banks lost the most, shed over 5 per cent.

"Technically the Sensex has formed long bearish candle which is indicating continuation of weakness in the near future. However, on intraday charts, the market is extremely oversold," says Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.

The intraday texture indicates a strong possibility of quick pullback rally from the current levels. For traders, now 52,300 would be the important resistance level. Above which, high chances of one quick pullback rally till 52,500-52,800 is not ruled out.

On the flip side, below 52300 fresh round of selling is possible. As a result, chances of hitting 51,700-51,500 would turn bright.