Midcap index is in process of bottoming out: Angel Broking

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

"The day clearly belongs to optimists and especially it feels great to witness something of this sort after yesterday's massive hammering (in the broader market). We did have a sluggish start; but index gathered some strength as the day progressed and eventually reclaimed the 11000 mark on a closing basis.

Today's bounce back was no surprise as we have been maintaining our positive stance since last few days and yesterday's correction was interpreted as a pullback move. Due to today's move, the Nifty has recouped major portion of its yesterday's losses and hence, 10920 - 10900 has now earned some significance as an immediate support. Going ahead, we would expect this move getting extended towards 11050 - 11078 and even beyond it. Hence, with a positional view, one should trade with a positive bias and use any decline as a buying opportunity as long as Nifty maintains its position above 10750 - 10700 on a closing basis.

We believe that today's smart recovery is quite important; but not in terms of the benchmark move. The real action was seen in the recent beaten down 'Nifty Midcap 50' index. We have been closely tracking this index and today, it has given first sign of near term bottom. We know it's quite early to take this stance, but the way some of the developments happened, we are impelled to do so. The midcap index has precisely taken a support at the lower end of the 'Falling Channel' and today has formed a bullish 'Engulfing' pattern. More importantly, it coincides with the weekly '89-EMA' support along with the 'Positive divergence' in 'RSI-Smoothened' on daily chart. Thus, traders are advised to focus on quality propositions within this universe in order to fetch higher returns."

Source : Equity Bulls

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