Breather continues as we head to an extended week: Angel Broking

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

"In the week gone by, we saw Nifty ascending to a great extent in first couple of trading sessions and in this process, has managed to clock record highs well above the 11000 mark. However, during the latter half, the index chose to consolidate a bit after a sharp run as we are heading for an extended weekend just ahead of the Union Budget. Eventually, the Nifty successfully managed to defend its important milestone of 11000 on a weekly basis.

Of late, we saw tremendous momentum in our market and hence, the index kept marching higher to conquer many important junctions. However, since last couple of days, we can see some respite in the market as the index approached its crucial near term point of 11100 before anyone could realize it. We have been stating the importance of this level as it coincides with the 161% price extension of the rally seen during 2008 - 10. Although, recently, there has been not much respect to any level but since 161% is considered as an important ratio as per the 'Fibonacci series' and mainly because the major event is around the corner now, it's important to draw attention to this point. Going forward, we need to see how market behaves in next 3 trading sessions; because in last couple of days, we have already witnessed a good amount of profit booking in number of individual stocks.

As far as trading strategy for next few days is concerned, we reiterate that traders should look to take some money off the table ahead of the major event. One can keep focusing on stock specific moves by following a proper exit strategy. On the sectoral front, the recent outperforming space, 'PSU Banks' seem to have lost its shine after the announcement of recapitalization plan. Going ahead, one needs to be very selective as it would now be a daunting task to find good trade set ups."

Source : Equity Bulls

Keywords