9560 - 9600 becomes a sturdy wall, but expect outperformance from Midcap counters: Angel Broking

Daily Market Wrap Up by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):

Technical Outlook

Today, our markets opened with a downside gap owing to negative cues from the global peers. However, barring the initial hour, we witnessed a smart recovery in the remaining part of the day to defend the 9500 mark convincingly on a weekly basis.

However, if we summarized the overall activity for the week, we can see breach of important support levels in the initial part of the week, which resulted into formation of a 'Lower Top Lower Bottom' for the first time in last six months. This certainly is not an encouraging sign in the short term. Further, we saw stiff hurdle of the '20-EMA' placed around 9560 - 9600, which we believe would continue to remain a sturdy wall in the forthcoming week as well. Now, looking at the weekly chart, it appears that the prices have closed tad below the '5-EMA' for the first time in the recent past. Considering all these evidences, we are of the opinion that the 'Buy on dips' market has now turned into a 'Sell on rise' market and hence, short term traders are repeatedly advised not to remain aggressively long in the index and in fact, try to use intraday rallies to go short. On the flipside, we may see lower levels of 9400 - 9340 in next couple of week's time. At the end, we would like to highlight one thing that, today we saw tremendous outperformance from the Midcap basket along with decent volumes. Hence, going forward, we expect some stock specific action in midcap counters which may offer decent trading opportunities.

Source : Equity Bulls

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