Nifty holding on to 10000, still no reason to worry for: Angel Broking

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

"Yesterday's tail end correction was followed by a flat to negative opening today, as indicated by the SGX Nifty. In the initial trade, the Nifty tried heading towards 10100, but this short spurt immediately got sold into. In fact, the selling aggravated across the board led by the banking conglomerates once again to test the sub-9950 levels on Nifty. Fortunately, the mentioned support of 9900 acted as a sheet anchor and in the last couple of hours of trade, Nifty gave a smart recovery to reclaim the 10000 mark on a closing basis.

Today, although we saw some follow through selling, fortunately the damage was not so big to dent the recent optimistic rally. But if we observe the overall action meticulously, we could see complete divergence in two most tradable indices, Nifty and Bank Nifty. The Nifty was in a process of recovering in the last couple of hours on the weekly expiry day (courtesy to IT space); but on the other hand, the Bank Nifty had its own plans. The banking index was completely unmoved and eventually ended with a decent cut. In our sense, whatever decline or profit booking we witnessed in the last two days, it was necessary and would be construed as a healthy sign if we have to extend the recent rally. For Nifty, momentum traders holding longs should now maintain a strict stop loss below 9900, in fact the same can be used to create fresh positions as well. As long as we are holding this support, the possibility of extending this rally towards 10150-10200 or beyond, cannot be ruled out.

As we alluded in the previous article, the low hanging fruit is already gone, and the easy trade is no more now. Market is going to test the patience, emotions of traders from hereon, because the move is not going to be as smooth as it has been in the recent past. Hence, one should avoid aggressive trades and rather wait for apt levels to reach to enter into a trade. Moreover, recently the stock specific trades were also quite easy to spot; but now there also one needs to be very fussy, because we have started witnessing a lot of whipsaws."

Source : Equity Bulls

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