Friday's Correction extends, Nifty enters sub 14300 territory: Angel Broking

Market Wrap-up by Mr. Ruchit Jain (Senior Analyst - Technical and Derivatives, Angel Broking):

"Nifty started the session around the previous week's close, but right from the word go, Nifty witnessed some selling pressure and by noon it breached the 14300 mark. The index then recovered from the low, but that intraday pullback got sold into, and it marked a low of 14222 during the closing. The Nifty index registered a loss of over a percent at the close while the Bank Nifty corrected by over 400 points after showing some resilience in the first hour of trade.

Nifty had already indicated signs of some correction in Friday's session as it closed below its 5 day EMA. The index breached its support of 14380 in the first hour of the trade, which confirmed an extension of this profit booking, and then we witnessed a good sell-off in the broader markets. The Bank Nifty showed some relative strength in the first hour of the trade, but it then synced with the market move and corrected for the rest of the session. The Nifty Midcap index resisted around some important retracement level last week, and thus this space too witnessed a decent profit booking in today's session. If we look at the broader picture, this correction definitely seems to be a corrective phase within an uptrend which would provide good opportunities to buy stocks on dips. However, from an intraday or a short term perspective, the volatility is likely to be high as some more profit booking could not be ruled out. Hence, traders should use intraday pullbacks to exit longs. The U.S. Dollar index has seen a sharp correction in the last few months and the index chart seems to be inversely correlated to the same. In last couple of sessions, we have seen a pullback move there and thus, this too seems to be leading to profit booking in equity markets. The immediate supports for the Nifty are placed around 14180 followed by 14130 while 14400 would be the immediate resistance."

Source : Equity Bulls

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