Technical & Derivatives Report 3rd October 2019: Angel Broking
Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):
"We had a gap up opening on Tuesday (in the absence of Chinese and Hong Kong markets) owing to positive global cues. During the first half, index gave couple of volatile swings in the range of 11550 - 11400. However, all of a sudden the selling augmented in the latter half; courtesy to mounting concerns over corporate loans. Fortunately, the selloff got arrested at the stroke of the penultimate hour and hence, we witnessed a decent recovery to close in the sub-11400 levels.
Ever since we had a massive bump up for two consecutive sessions, markets went in to a slumber. Although, Nifty was gradually sliding lower, the banking index was clearly a laggard as we witnessed sharper retracements in this high beta index. On Tuesday, at one point, things looks extremely intimidated, but the one who dragged, eventually managed to become a saviour as well. Now, we can interpret it as a kind of panic selling, which cooled off towards the fag end of the session. Tuesday's low of 11247.90 in Nifty should now be seen as a sacrosanct level. Because market recovered in the midst of a panic sell off from this junction and it coincides with the key moving averages as well. Moreover, not to forget, 11200 previously was acting as a sturdy wall and hence, should be seen as a sheet anchor now. On the upside, if things (panic) with respect to banking and NBFCs have cooled down a bit, then we should ideally continue our northwards path again to retest 11450 - 11550 levels.
Traders are advised to keep a close tab on above mentioned levels and since the volatility has increased drastically, it's advisable to stay light and try identifying apt candidates for a trading perspective."