Some decent profit booking after a relentless run: Angel Broking
(Time Zone: Arizona, USA)
Daily Market Wrap Up by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):
"Similar to the recent trend, our markets opened higher owing to cheerful mood across the globe. In this process, Nifty registered a new high of 13145.85, but this was followed by a massive profit booking throughout the remaining part of the day, Barring one small attempt to bounce back around the mid-session, index kept on correcting to shed more than 300 points from the high to mark weakest session in the November month. Eventually, the day ended with a cut of one and half a percent from the previous close.
How many times in the past have we seen the market correcting sharply after posting a record high on the same day. Today, it was clearly one of them as we saw the index taking a nosedive after reaching an important level. By no means, it's a complete reversal of the trend, because we can construe this as a profit booking after a relentless rally. In fact, in our yesterday's commentary, we had clearly advocated taking some money off the table in the zone of 13100-13200. Today's correction precisely triggered after entering this key resistance zone of 127% 'Price extension' of the previous key swing highs and lows. We are now stepping into the historical November month expiry day and hence, some volatile moves cannot be ruled out. In our sense, one should control it's temptation to go long if Nifty rebounds towards 12950 - 13050. On the flipside, 12800 - 12730 are to be seen as key supports. Only a sustainable move below 12730 would extend this correction.
Traders are advised to take a note that this is merely a profit booking and even if it extends, it should be considered as a healthy sign. For a time being, avoid aggressive bets and use meaningful declines to go long."