Still just a profit booking and not a trend reversal: Angel Broking

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

"We had a subdued start with a mildly positive bias today, despite not so favorable cues from the Asian peers. Subsequently, index slipped into a consolidation mode with lot of individual stocks giving decent price movements. However, suddenly from nowhere, there was complete sell off seen in last 45 minutes of trades and within no time index slid below the 11600 mark. This price activity has poured complete water on the efforts of our market took to hold these important levels since last 4 - 5 days.

In general scenario, the broader market falling towards the fag end of the day with such a velocity is considered to be an alarming sign. If we analyze the chart structure of sectoral indices (including Midcap 50), we can clearly see this correction as a profit booking move. Now, it is important to see how market behaves in the subsequent session. Intraday supports are placed at 11569 - 11532 and in case of extending profit booking also, we would not call it a complete trend reversal. For us, this market still remains to be a 'buy on dips' kind of market and hence, without hesitating much, we would use this decline to buy into with slightly positional perspective. As far as resistance levels are concerned, 11639 followed by 11680 would be seen as intraday hurdles.

Considering today's broad based profit booking, we would advise traders to be a bit agile now and hence, one needs to be concentrating on individual stocks that are still looking positive with a near term horizon."

Source : Equity Bulls

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