The markets are hovering close to the long-term moving averages for quite some time now. Although, there is no clear confirmation of a bounce, but a meaningful bounce is far from due following the recent correction. To support our case, one can see the selling ease as participants wait for the next directional move.
Yesterday, one saw that the Sensex was unable to sustain above the 16,100-level, hence slipped towards the end. The Sensex after touching a high of 16,141, tumbled into red to a low of 15,892 and finally settled with a loss of 120 points at 15,922.
A meaningful bounce for the Sensex means a pull back to at least 16,600, from its recent low of 15,652. Today, the index is likely to find support around 15,825-15,800-15,770, while face resistance around 16,015-16,045-16,075.
The 200-day DMA for the index is at 15,624, the short-term (20-days) DMA is at 16,611 and the 50-days DMA is at 16,972. The MACD and the directional index too are showing signs of the current (down) trend weakening.
The NSE Nifty moved in a range of 79 points, from a high of 4,827, the index dropped to a low of 4,748, and finally ended with a loss of 35 points at 4,757.
The Nifty may face resistance around 4,787-4,796-4,806, while seek support around 4,727-4,718-4,708.
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