Some respite in the market, Metals and midcaps poised for extended moves: Angel Broking

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

"The latter half of the week brought back smile in traders'/ investors' fraternity after undergoing some challenging period. First couple of days extended previous week's losses; however, the remaining part turned out to be savior for our market, courtesy to strong cues from the global bourses. Although, the overall action in index was not that big, the broader end of the spectrum did extremely well and hence, we not only defended key support but also managed to reclaim the 10800 mark.

Let's dig into a bit of technical now. Tuesday's session was quite crucial for our market. Despite taking a nosedive in the penultimate hour, our markets somehow managed to defend the recent swing low of 10583.65 (low on January 29). The daily chart depicted an 'Inverted Hammer', which eventually got converted into a 'Morning Star' pattern due to a price development on the following day. Since, there was an occurrence of a 'Positive divergence' on hourly chart (on Tuesday); markets had all the reason to give a decent bounce back. This is what we saw in the remaining part of the week. Now going ahead, as long as 10580 is not broken, traders should look to trade on the positive side. Before this, 10720 - 10646 would be seen as immediate supports. On the flipside, '200-day SMA' level of 10860 would be seen the level to watch out for. A move beyond this would trigger a decent up move towards 10920 - 11000 levels.

This week's bounce back was initially propelled by the banking index and later on by IT and Auto. But the only outshining sector throughout was the 'Metal' space. As we had anticipated, all constituents within this high beta pocket soared to a great extent. Also, midcaps had shown some signs of revival; do watch out for this as well. All in all, set up looks good for the extended relief rally; but, considering recent moves, it's better to take one step at a time."

Source : Equity Bulls

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