Market takes a breather around 200-SMA: Angel Broking
Daily Market Wrap Up by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):
"Our markets carried the previous week's positivity on Monday as well and hence, the Nifty started the proceedings with a decent upside gap, owing to favourable cues from the global bourses. However, the momentum disappeared all of a sudden from the market, which resulted into a lacklustre movement throughout the remaining part of the day. It is hard to believe but the Nifty gyrated in a slender range of merely 160 points during the week. In the midst of all this, the Nifty concluded the week with moderate gains of one and half percent gains.
It's been a stellar Bull run for our markets since the March lows and markets never looked back to reach the crucial zone of '200-SMA' on daily chart. The kind of lethargic activity we witnessed in the week gone by was quite evident, because the market has seen a relentless move without any major halt in between and has reached such a crucial junction. Firstly, as mentioned the key moving average of 200-SMA on a daily chart. This coincides with the Weekly 89-EMA as well as monthly 20-EMA and hence, the bulls had to respect them. Ideally, if the market has to correct, this is the perfect zone from where it can. In fact, in the previous article, we had clearly advocated booking profits in the ongoing rally in the zone of 10700-11000 and we continue to do so at least for momentum traders. But by no means, we advise going short on the market because the momentum in individual stocks is still strong and importantly, we are seeing a consensus opinion about the market correcting from current levels. As we all know, when everyone expects a fall, it never comes and vice versa. So, in our sense, the Nifty would first surpass the 10850 mark and head towards the 78.6% retracement zone of the entire fall i.e. 11000-11200, where we can actually see some profit booking taking place. If consensus view has to fail, this possibility cannot be ruled out.
Any assumption needs a proper exit strategy if not worked as per the expectation. Hence, in this scenario, the hypothesis remains valid as long as the crucial support of 10660-10560 remains intact. A breach of mentioned supports would certainly trigger a decent profit booking in the market and hence, keep a tab of all the mentioned possibilities and key levels. It would be important to highlight that the banking space holds a key in all this and hence, all eyes would be on its heavyweight constituents as well."