The Indian stock market opened higher amid sharp buying in IT stocks. The Nifty 50 index opened 178.05 points higher at 23,576.15 and the Bank Nifty was trading 277.7 points up from the previous close. Sensex rose 588.17 points to 75,369.93.
Other indices also finished lower, with the Nifty Midcap Index losing 0.26% and the Smallcap Index losing 0.6%. The Indian rupee was trading 21 paise lower at Rs. 95.76 on Tuesday compared with Friday’s closing price of Rs. 95.55.
Foreign institutional investors remained net sellers on Friday, offloading Rs. 930.90 crore of Indian equities, while domestic institutional investors bought a net Rs. 1,968.17 crore, according to NSE data.
From a technical point of view, the long-term trend in the Sensex remains sideways and in the coming days, it is expected to trade in a range of 74,000-75,200.
If the index breaks above the 74,000-74,160 range, the recovery effort will likely remain intact and give way to further upward movement, and in case of a break below 74,000, the selling sentiment is likely to intensify further, said Sachin Gupta, VP, Technical Research at Choice Equity Broking Private Limited.
Technically, the daily RSI of Nifty 50 is still moving below the 40 level, which means that the bearish trend is still in place. Major buying will be necessary if there is to be any improvement in the near term.
“The 23,250-23,230 zone is expected to provide a strong support level going forward, whereas 23,600-23,620 is likely to pose an immediate resistance level; a break below 23,230 could further prolong selling pressure towards 23,080, Sudeep Shah, Head, Technical and Derivatives Research, SBI Securities, added.
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On the daily time frame Bank Nifty formed a strong bullish candle with a lower shadow which shows trading activity at lower levels.
The lower end 56,000-55,900 zone is expected to provide a significant support level, while a strong break below 55,900 can fuel further selling pressure to 55,500 levels.
On the upside, 57,100-57,200 might be an immediate resistance level and if the price action keeps going above 57,200, then it can extend the pullback to 57,500 levels, said Sudeep Shah, Head, Technical and Derivatives Research at SBI Securities.
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