One more attempt towards 9700 would be an exit opportunity - Angel Broking Weekly Review Report, June 17, 2017

Our market started the proceeding for the week inside the negative territory on Monday on the back of subdued global cues. The Nifty continued to slide further from the initial trades and concluded the session with a loss of around half a percent. In next couple of sessions, our market ended on a flat note; which was followed by a corrective move on Thursday. Friday's session too remained lucklustre and eventually, the Nifty ended the week a tad below the 9600 mark with a cut of around a percent over its previous week's close.

Key Moving Averages:

- The '89-day EMA' and the '89-week EMA' for the Sensex/Nifty are placed at 29822 / 9230 and 27725 / 8524 levels, respectively.

- The '20-day EMA' and the '20-week EMA' for the Sensex/Nifty are placed 30972 / 9574 and 29770 / 9214 levels, respectively.

The consolidation phase in our market continued for the third consecutive week, which was very much on our expected lines as we have been mentioning about confluence of key multiple Fibonacci ratios in a narrow range of 9620 - 9720 in our previous articles. They are, 1) the 127% Reciprocal retracement of the recent 'Bullish Flag' pattern on daily chart is at 9642, 2) The 'Golden Ratio' (161% Reciprocal retracement) of the corrective move from 8968.70 to 7893.80 is at 9624 and most importantly, 3) The 'Multi-year Price Extension' (127% of 2252.75 to 6338.50 from 4531.15) is at 9720. The Nifty has started correcting precisely from the higher end of the mentioned resistance zone and formed an 'Evening Star' pattern on weekly chart. An occurrence of such pattern around important ratios certainly does not augur well for our markets. But, looking at the hourly chart, we expect one more attempt towards 9700 and that would be according to us would be an exit opportunity with a short term horizon.

We are already advising our clients to start booking profit in longs from last couple of weeks and we continue to maintain our cautious stance on the market. Going forward, 9680 - 9720 zone will remain to be a resistance zone for the index. Thus, traders are advised to remain light on index and adopt stock centric approach with a proper exit strategy.

Source : Equity Bulls

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