Daily Market Wrap Up by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):
"Despite SGX Nifty suggesting a positive start, we had a gap down opening to surprise most of the market participants. There was some nervousness seen in the initial trade, but all of a sudden strong buying emerged at lower levels which not only continued but also accelerated as the day progressed. In this course of action, Nifty went on to thrash all intraday hurdles and eventually concluded the weekly expiry well above the 11800 mark by clocking smart rally of more than a percent.
It was a splendid day for our markets and it has certainly brought back wide small in the traders' fraternity. Let's get into a bit of technical now. If we refer to our last couple of articles, we had mentioned about the formation of 'Bullish Wolfe wave' pattern in Nifty on hourly chart. As per the requirement, the 'Potential Reversal Zone' of this pattern was at 11630. Since last three days, index has been rebounding sharply after making lows precisely around this point and today finally this pattern has showed its significance. In addition, the higher end of the upward gap area created post the exit poll numbers was around 11591 and we were of the firm opinion that this gap area will not be violated. Today's colossal rally has validated this contradictory opinion and now we expect this upward trajectory to continue towards 11900 - 12000 in coming days. On the flipside, the intraday support is now seen at 11800 - 11756.
The highlight of today's upsurge was the sharp bounce back in so many laggards who had beaten down brutally in the recent past. In our sense, this relief move is likely to extend but we would still advise traders to be a bit fussy when it comes to stock selection. It's better to stick to quality midcaps that are likely to give decent moves and should ideally avoid such consistent draggers despite giving eye-popping moves."