Don't get carried away by the momentum, use rallies to exit longs: Angel Broking

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

"Yesterday's smart recovery from sub-10100 levels was followed by a gap up opening owing to favorable global cues. In fact, the index started marching right from the word go and eventually managed to extend yesterday's move to reclaim the 10250 mark.

Looking at yesterday's recovery, yet another bout of optimism was clearly on cards. However, due to strong momentum the index managed to surpass our expected resistance of 10220 convincingly. We have to accept such moves especially when the higher degree undertone is still bullish. Going ahead, we continue to remain a bit cautious when it comes to near term outlook. The 'Lower Top Lower Bottom' formation is visible and as per the 'Dow Theory', any move in the opposite direction of this structure is considered as a pull back or a retracement. Hence, going by this rule, we construe this as a relief rally and expect the index to face strong selling pressure at higher levels. For the coming session, 10273 - 10312 would be seen as immediate hurdles; whereas, on the lower side, 10220 - 10180 needs to be tracked quite closely. Traders are advised not to get carried away by this momentum and rather use such relief rallies to exit existing long positions."

Source : Equity Bulls

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