Daily Market Wrap Up by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):
"Today's session started on a flat note; however, the selloff in the global markets continued to weigh down heavily on our markets. As the day progressed, the negativity reinforced and in the course of action, the Nifty eventually slipped below its recent crucial support of 10700.
In ideal scenario, a slide below recent support should have been interpreted as a breakdown from a consolidation range. But, we have been mentioning a range of 10700 - 10650 as a key support zone for the Nifty. The Nifty did not break its lower end and eventually closed at the midst of the range. One more thing that is putting us in two minds i.e. the construction of 'Bullish Wolfe Wave' pattern on hourly chart. It is considered as a contradictory pattern and has a complex structure. As per the requirement, all conditions have been met and hence, we are not too convinced with today's correction. We would rather wait for further confirmation whether its a beginning of new corrective move or a possibility of some bounce back. Going ahead, if index stays below 10650, it would confirm weakness and in that case, we could see our markets sliding lower. However, in bullish scenario, a move beyond 10720 would lead a strong bounce back towards 10760 or beyond.
At present, traders are advised to keep a note of these scenarios and should rather position themselves accordingly."