Smart tail-end recovery looks encouraging, 'Metal' to continue outperformance: Angel Broking

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

"The mayhem continued for the third day as the concerns started to mount further after Indian Rupee continued its weakness sharply towards the 72 mark against the US Dollar. This was supported by some nervousness in major Asian peers, resulted into Nifty testing the sub-11400 mark. Things were looking extremely bleak at one point of time; but, fortunately, we had a v-shaped recovery in the final hour of the trade, which relieved most of the traders as the index managed to pare down major portion of losses.

Due to this late recovery, the daily chart now looks a bit encouraging. We can observe a bullish 'hammer' pattern on daily chart, which itself suggests a smart buying at lower levels and now would require a follow up buying to activate the pattern. Hence, going ahead, it would be important to see how market behaves in the first half. If Nifty manages to stay above 11500 - 11515, which we believe would, then this may most likely would trigger further recovery and in this case, 11530 - 11580 can be rested. In fact, this price action then would lead to a resumption of recent uptrend. On the downside, 11430 and 11393 would play a major role; because, holding of these supports would provide some base to start the next leg of the rally.

Directionally, we still believe we are in buy on dips kind of market; but with a momentum perspective, all these above mentioned scenarios need to be observed meticulously. Today, the Metal sector once again stood out to be an outshining sector and hence, one should focus on this universe which is poised for decent moves. Apart from this, the 'Nifty Midcap 50' index had a remarkable recovery after taking some brutal beating in last couple of days. The closing was quite promising and hence, it would be important to keep a close eye on this development as well."

Source : Equity Bulls

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