Low hanging fruit is gone now, be very selective in stocks: Angel Broking

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

"The week started with a bang on Monday as we saw a gap up opening first which was then followed by a massive intraday rally; setting the tone for the rest of the week. Following days did not disappoint at all, in fact there was strong optimism seen throughout to post massive intra-week rally. With this, Nifty managed to clock biggest weekly gains in last four months. The major charioteer for this mesmerizing rally was none other than the heavyweight banking index. What a stellar move we witnessed throughout the week to register fresh highs in the process. Eventually both indices saw some mild profit booking towards the fag end of the week and it was very much evident also after seeing such relentless rally.

Let's dig into a bit of technical now. In our sense, the stage was set for this kind of move when Nifty convincingly surpassed 10900 last Tuesday. What encouraged us is the outperformance of Midcap and small cap basket which started few days prior to this. And then the major driver 'Banking' started showing its dominance. Considering all these evidences, we were vocal about this rally getting extended towards 11300 - 11400, which was the higher end of the 'Megaphone' pattern. Index has reached this junction and in fact due to strong exuberance, Nifty extended its march towards the 11500 mark. Now, we are at a kissing distance from this figure and it's a matter of time, index would actually see this number. But, the point is, will there be some exhaustion seen or index would continue heading towards all-time highs.

Honestly speaking, we are at crucial technical ratios and considering the pace of the move, the risk-reward for fresh trader has gone for a toss now. In our sense, some kind of consolidation would now be seen for a while before unfolding the next leg of the rally. By no means, one should go short, rather it's time to be selective when it comes to individual stocks and should be done with a proper money management. On the higher side, 11500 followed by 11600 would be the immediate levels to watch out for and on the downside, 11370 and 11300 should be seen as important supports in the forthcoming week."

Source : Equity Bulls

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