Sensex, Nifty outlook for tomorrow: Profit booking or further upside ahead?

Domestic equity benchmarks Sensex and Nifty settled higher on Tuesday for the third straight session. In this process, the two indices formed bullish candles on the daily chart. Analysts said the momentum stayed positive but some profit booking at higher levels cannot to ruled out. A level of 79,000 for Sensex and a range of 24,660–24,700 for Nifty are crucial resistance levels going ahead, they said. 

For the day, the BSE Sensex stood at 79,273.33 at close, up 753.03 points or 0.96 per cent. Nifty settled the day at 24,576.60, up 211.75 points or 0.87 per cent.  

Sensex outlook

Shrikant Chouhan, Head Equity Research at Kotak Securities said Sensex formed a bullish candle on the daily chart and held on to an uptrend continuation formation on intraday chart, which is largely positive.

"We are of the view  that the short-term market texture is bullish, but due to temporary overbought conditions, some profit booking may occur at higher levels. For day traders, 79,000 would act as immediate support zone. Above this level, Sensex could continue its positive move towards 79,800–80,000. Conversely, below 79,000, we could see a quick intraday correction," Chouhan said. 

He said below the 79,000 level, Sensex could retest the levels of 78,700–78,500.

Nifty outlook
A long Nifty bull candle was formed on the daily chart that has surpassed the resistance of previous downside gap at 24,400 level. This is positive indication, said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities. 

Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities said Nifty's 100 day EMA zone at 24,660–24,700 will act as an crucial hurdle for the index. A sustained move above 24,700 could trigger further upside towards 24,950, he said.

"On the downside, the 24,460–24,430 zone is expected to act as immediate support," Shah said.

Bajaj Broking said the bias stayed positive, above last Wednesday's gap up area of 23,850-24,100. "Nifty is expected to maintain positive bias and gradually head towards 24,700-24,800 levels being the confluence of the 200 days EMA and the 61.8 per cent retracement of the entire decline 26,373 to 22,183," it said.