Extended profit booking led by negative global cues, but still avoid shorting: Angel Broking

Daily Market Wrap Up by Mr. Sameet Chavan - Chief Analyst - Technical & Derivatives, Angel Broking.

Technical Outlook

Finally, the momentum traders (the bulls) had to take it on the chin as we saw surprising gap down opening citing to extremely overnight negative cues from the US markets. Subsequently, the index remained in a narrow range with a negative bias throughout the remaining part of the session to conclude with a percent cut over its previous close.

Yesterday, although, we can see a percent cut on the benchmark index, the stock specific damage was immense. This was certainly a bit unexpected for us; but having said that, we would interpret this as a corrective move within the larger degree up trend. As per the gap theory, the index is in a process of filling a gap created on March 14, 2017. At this juncture, 9020 - 8975 would be seen as strong support levels and going by our recent bullish stance, we are not at all hesitant to advise a contradictory action around this mentioned support zone. Despite this strong corrective move, we reiterate that the Nifty is likely to head towards 9400 - 9600 (price extension of previous up move from recent low of 7893.80) over the next few weeks. Having said that, in between some consolidation or a profit booking by momentum traders cannot be ruled out. Traders waiting for dips to initiate fresh longs post the UP election outcome should not get carried away by this pessimism. The chart stricture remains positive as long as 8850 remains unbroken on a closing basis.

Source : Equity Bulls

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