Finace And Stock

Bear grip? Mumbai broker cites tech charts to say Sensex headed for 66,666

NEW DELHI: The selloff in domestic equities over the past two days may have dented your confidence, but there are some bulls in the market who are undeterred and see Sensex reaching new heights soon.

Citing technical indicators, an analyst at Mumbai-based brokerage Choice Broking says the Sensex has the potential to deliver up to 13 per cent upside from its current level. He says a number of positive technical indicators point towards extreme bullishness.

“In a longer time horizon, the rally is likely to be continued till the 66,666 magical number in the next few months, which is a 100 per cent extension of the recent journey,” said Sumeet Bagadia, Executive Director at the brokerage.

“Sensex has breached the prior resistance at 59,737 and managed to sustain above the 60,000 mark. The index has been flying above the Ichimoku Cloud & Bollinger Band formation. All the supportive indicators like RSI, Stochastic and MACD suggest a rally in the near term,” he said.

In the last 18 months, the index has already given over 135 per cent return. Easy liquidity, improving economic conditions and a rapid vaccination drive have lifted the risk appetite among investors.

However, recent commentaries from the US Fed, a showdown in the US Senate over government spending, which is threatening an imminent government shutdown and caused Treasury yields to surge and concerns over slowing economic growth amid weak consumer confidence data have turned some investors cautious; but certainly not everyone.

“As per the Fibonacci Extension from 51,802 to 59,737 levels along with a small fall suggested a 50 per cent extension at 62,222 level, which could be the short-term target for the BSE benchmark,” Bagadia said.

He, however, did not rule out some profit booking or correction in the market in the interim. “Some upward or downward movement could be seen while reaching a new milestone, but every dip will be a good opportunity for investors,” he said.

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