Despite strong profit taking, markets managed to close in the green: Angel Broking
Daily Market Wrap Up by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):
"The inaugural day of the new financial year kick started with a bang, taking cues from the cheerful mood across the globe. Subsequently, index extended this early morning lead in the first half to hasten beyond the 11700 mark. However, all of a sudden, strong profit booking across the globe weighed down heavily on our market and as a result, the Nifty nosedived in the penultimate hour to pare down major portion of early morning gains. Despite all this, index managed to close in the green by adding nearly four tenths of a percent to Friday's close.
This is one of the key dimensions of any financial market. The moment everything looks hunky dory, market tends to surprise us on most of the occasions. And something similar to this, we witnessed towards the fag of session. Now, with today's volatility, the daily chart depicts a 'Doji' candle, which is an indication of uncertainty. Today, instead of uncertainty, we would rather interpret as a profit booking after recent relentless run. Hence, we still maintain our positive stance on the market and advice against going short. In between, such hiccups are normal and it's advisable not to get carried away by such sharp declines.
Now, as far as levels are concerned, today's low would be seen as a key support for the coming session. A sustainable move below this would extend this profit booking towards 11600 - 11580 levels. On the flipside, we still believe that index is going to see fresh record highs soon. Today, banking index clearly underperformed, but it's evident at such elevated levels. Also, the midcap index which has been buzzing since few days has faced resistance around key Fibonacci ratio. So some consolidation may be on cards; but it would probably be very short lived. Meanwhile, one should keep focusing on individual stocks that are showing strength and are likely to provide better trading opportunities."