Some respite in banking and midcap baskets: Angel Broking

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

"It was a week of consolidation for our markets as we saw a fragile start on Monday followed by some consolidation for three days and then a good pull back move to conclude at the highest point of the week. The tail end rally was mainly propelled by the heavyweight banking conglomerates along with the beaten down Midcap index.

Going by last few days' price action, 10340 - 10300 seems to have earned great respect from the short sellers and due to weak attempts to sneak through did not have any conviction at all. Hence, going ahead, we may see this consolidation or breather getting extended for few days. On the higher side, 10500 - 10620 would be seen as immediate boundaries for the coming week. Any sustainable move beyond this would result into a decent relief rally in the market. However, the broader picture would still remain the same as we expect the selling to recommence at higher levels. If we have to take a directional bet, we would certainly stick to our cautious stance considering the 'Bearish Engulfing' pattern on weekly chart along with the 'RSI-Smoothened' (daily) slipping below the 30 mark. This indicates a probable correction towards 10200 and then to test the '200-day SMA' placed around 10090 once the corrective move resumes.

At present, the near term strategy would be to follow stock centric approach if index manages to give a decent relief rally and then use such rebounds to create fresh shorts at higher levels. This week's weakening in Indian Rupee (INR) against the US Dollar was clearly an alarming sign for our market. So, one should keep a close eye on this development as well along with US markets."

Source : Equity Bulls

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