Profit taking seen at higher levels, expect further consolidation: Angel Broking

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

Technical Outlook

Yesterday's strong up move along with overnight rally in US bourses led to a gap up opening in our market by nearly three-tenths of a percent. However, as expected we saw some profit taking at higher levels and thereafter, index remained in a small range to conclude the session on a muted note. During the day, the Oil & Gas and Energy Stocks were bucking the trend.

Now, with reference to previous article, if we look at today's high (9650.65) from where Nifty started correcting, it precisely coincides with the higher end of the mentioned resistance zone i.e. 9630 - 9650 (78.6% Fibonacci retracement of 9698.85 to 9448.75). However, the stock specific outperformance continued once the index slipped into a consolidation mode. We reiterate that, since we already had a confirmation of 'Lower Top Lower Bottom' on daily chart last week; the mentioned resistance zone should continue to act as a sturdy wall. Therefore, index specific longs should ideally be lightened up (or traders can look to go short keeping a strict stop loss at 9720) around it as the possibility of some consolidation in a range of 9650 - 9450 remains high. Within this, we expect continuation of this stock specific action in midcap counters which may offer decent trading opportunities.

Source : Equity Bulls

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