PSBs once again became the show stealers: Angel Broking

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

"Today, once again, global cues were not that encouraging and hence, we had a gap down opening below the 10400 mark. This was followed by some follow through selling during the first half; however, post mid-session, we saw good amount of buying interest emerging at lower levels. This optimism pushed the index higher to shave off major portion of losses.

During the initial hour, our markets extended losses after sliding below previous day's low. Ideally, this move should have extended towards the next junction of 10300; but, as expected, the PSU banking basket came back smartly and eventually managed to lift the traders' sentiments to reclaim the 10400 mark. Today's move clearly indicates that although we are in a 'Sell on rise' kind of market, this market is not willing to give up so easily. For a time being, index is clearly consolidating in a range of 10480 - 10300 and within this, one should ideally avoid trading index aggressively and should rather focus on individual stocks.

We would like to highlight one thing (for 'Option' traders); in such kind of consolidation, it would not be a prudent strategy for directional traders to go long aggressively in 'Index Option' segment. They should either wait for a trended move to emerge or should ideally trade index futures and write slightly out of the money options in order to get benefit of this consolidation."

Source : Equity Bulls

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