Nifty closed below 14000 for the first time in new year: Angel Broking

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

"Our markets were closed yesterday on account of the Republic Day; but the global peers had couple of weak sessions, which we had to digest at the opening today. Surprisingly, markets opened on a flat note, taking cues from the positive Dow futures today morning. However, this turned out to be a formality as the selling resumed right from the word go to slide back to the negative territory. As the day progressed, indices kept on breaching all intraday supports one after another. Eventually, the Nifty concluded with almost couple of percent losses to mark close below 14000 for the first time in the new year.

The way market behaved in the previous two sessions, it was clearly a sign of weakness and we had hinted towards the possible correction from the levels of 14600 - 14750. The main reason behind this pre-emption was the 3-points 'Negative Divergence' at new high. This anticipation turned into a conviction after banking index confirming a 'Double Top' on Friday by closing below crucial swing lows. The Nifty was yet to follow this and today finally it broke important support of 14222 with some authority. It is rare to see market giving trend reversal ahead of the major event, but looking at today's close, further correction looks on cards. We continue to remain cautious and advice using bounce back to go short with a momentum perspective. For the coming session, 14100 followed by 14200 are to be seen as immediate hurdles; whereas on the flipside, 13850 - 13772 are the levels to watch out for.

Since the much awaited correction has come before the event, things have become extremely tricky now. It would be difficult for both counter parties (Bulls and Bears) to carry their positions on the event day as both would find themselves stranded at the middle of the ocean."

Source : Equity Bulls

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