Technical & Derivatives Report by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):
"On Friday, index continued its recent selling streak and gave a sharp correction to sneak below the 10650 mark in the initial hours. Fortunately, a strong buying emerged at lower levels and thereafter, index had a v-shaped recovery to not only trim all losses but also to enter a positive territory and reclaim the 10800 mark.
Recent correction got arrested in the first week of August and then index went into a consolidation mode. But during the last week, the sell-off triggered once again to breach key support levels. But since we were extremely oversold and reached crucial February lows around 10600, market took a complete U-turn and was off lows considerably. Now technically speaking, we can see a formation of 'Bullish Piercing' pattern on daily chart (in Nifty). The said pattern will show its significance once index manages to sustain above 10900. In this scenario, we can expect further recovery towards 11050 - 11150. The banking index was a bit underperforming amongst the two indices and if Nifty has to regain any strength, banking index needs to step up. Hence, one needs to closely watch how banking conglomerates perform in this week. For Nifty, the support now can be seen around 10728 - 10637. In case of breaching these crucial supports, we can see extended correction in the market.
Apart from this, the broader market was clearly the shining pocket on Friday along with some other sectoral movers. The 'Nifty MIDCAP 50' confirms a 'Bullish Engulfing' pattern on daily chart and the way it's shaped up, we can witness sharp short covering moves in the broader market if Nifty manages to give decent recovery. At this juncture, traders are advised to keep a tab on all these possibilities and should act accordingly."