Markets slip again on rising Covid cases; should you book profit for now?

For Sensex, Nifty50, and Nifty Bank, the underneath trend is bullish till the crucial support levels are held on a closing basis.

Extending the previous session's decline, the benchmark indices were trading around 0.5 per cent lower in the morning deals on Thursday as surging coronavirus cases in the US and many European countries dampened the hopes of economic recovery. Fresh curbs by Germany and France added to the woes further. That apart, trading was also volatile as today is the last day of the futures & options (F&O) contracts for the October series. 

So, what lies ahead for the indices, and what should be your trading strategy in the current market environment? Here's the clue.

S&P BSE SENSEX:  The index is witnessing a selling pressure around 41,000 mark. This suggests minor profit booking that may spark a bigger sell-off only after an aggressive close below 39,400 mark. Till that happens, the volatility and profit booking may continue. The index may regain the faith of market participants if it defends 39,400 decisively and exhibits strong rebound above 40,200 levels. If it fails to do so, then the weakness may see a downside towards 38,000 mark. CLICK HERE FOR THE CHART
 
NIFTY50: With a sharp descent in last few sessions, 11,650 has become the deciding level for the positive stance. Any breach on the closing basis may trigger further downside, which can lead to a drop of another 400 points towards 11,200 levels. Nevertheless, the underneath momentum seems fairly in the favour of bulls till major sell-off does not occur with strong volumes. The overall scenario is building up fear, but aggressive selling pressure is not exhibited on the daily charts. CLICK HERE FOR THE CHART
 
NIFTYBANK:  On a broader perspective, this index needs to scale above 25,630 mark, which is its 200-weekly moving average (WMA). To do this, it needs to conquer the immediate resistance of 50-WMA placed at 24,590 decisively. At the current levels of 24,190, the index is facing challenges to conquer 50-WMA and if it fails to hold the upward momentum, then it may retest the downside support of 23,200 levels, which is its 200-days moving average (DMA). The trend is bullish as the index is holding optimistic sentiment above 200-DMA as of now. However, it may exhibit weakness if the index takes longer to conquer 50-WMA. CLICK HERE FOR THE CHART