Relief move extends for the third day: Angel Broking
Daily Market Wrap Up by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):
Yesterday's colossal rally was followed by a positive start for the day, despite some sluggishness in the global peers. After some initial consolidation, our markets picked up strong momentum to post positive close for the third consecutive day. Despite some intraday declines, the Nifty managed to add yet another three percent gains to yesterday's relief move and concluded the terrifying March series with nearly 15% recovery from lows.
On Tuesday, the stage was set for this strong rebound after recent brutal sell off. In the process, Nifty precisely met with our mentioned levels of 8200-8400-8600 one after another. Now technically speaking, the Nifty has displayed first sign of strength i.e. a convincing close above '5 day EMA' after a month. In addition, the 'RSI-Smoothened' on daily chart has confirmed a positive crossover in deep oversold territory. Considering all this, we may see this up move getting extended from hereon.
Going by technical observations if Nifty manages to stay beyond 8750-8800 levels then we may see extension of the rally towards 9000-9300. Obviously we need not forget that current situation is different due to pandemic across the globe and hence, a possibility of whipsaws cannot be rules out. If above mentioned technical set up has to work well, things with respect to coronavirus should not aggravate in coming days. As far as supports are concerned, 8500 followed by 8300 would be seen as immediate supports. Although markets are at present witnessing a good relief move, traders should avoid aggressive bets and keep booking profits regularly on momentum trades."