Higher volatility keeps traders on toes: Angel Broking
Market Wrap-up by Mr. Ruchit Jain (Equity Technical Analyst, Angel Broking):
"Following the negative global cues, the Nifty started trading for the day with another gap down opening. The index showed recovery from its 200 DMA support during the day; however it again witnessed a sharp selloff in the last hour of the trade to end with a loss of a percent.
The spike in the volatility in the global markets kept the traders on toes today as at one point of time, it seemed that the 200 DMA support has played its role and the index was all set for the much required pullback. However, the index again corrected sharply in the last hour of the trade and has ended around the mentioned average. In last few sessions, Nifty has already seen a sharp correction of about 600 points and is now trading in the vicinity of its support zone of the 200 DMA support and the swing low which is in the range of 11685-11615. The momentum reading (RSI Smoothened) on the hourly chart also is in oversold zone and such scenarios usually lead to the pullback moves. Hence, we could see some relief in the near term on the indices if we manage to hold the above mentioned support. An up move, if any, could pull the index towards 11800 and 11885 which would be the levels to watch out. However, the volatility is expected to remain high in the near term and hence, traders are advised to focus on stock specific moves and trade with a proper risk management strategy.
In last couple of sessions, the Bank Nifty index has shown some relative strength to the Nifty and this index too is trading near its 200 DMA support. Thus, this index could play a pivotal role during any pullback move and hence, one should keep a tab on the index heavyweights from this sector if the above scenario turns out in line of our anticipation."