Daily Market Wrap Up by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):
"Yesterday's tail end surge was followed by a flat start today. As expected, in the initial trades, we witnessed a strong optimism to head towards the 11350 mark. Subsequently, the index consolidated with a hint of mild profit booking throughout the first half. However, post the mid-session, the selling aggravated in some of the heavyweights like Reliance, HDFC Band, ICICI Bank and selective IT names. This resulted in a sharp decline to sneak below the 11200 mark. Due to some modest recovery at the end, the Nifty ended the session with a cut of nearly 100 points.
Till the first half, things were very much on expected lines and importantly, the banking space looked a bit firm. However, a strong bout of profit taking in the latter half poured complete water on yesterday's smart move. Practically the 'Bullish Flag' mentioned yesterday is still intact; but theoretically this price configuration does not see any pull back move immediately. It is known for it's one way move post the breakout. Hence, we do not want to give much weightage to this pattern now. Today, although the key levels are still unbroken, but the way market dipped, it has shaken the confidence of the bulls and we need to pay attention to this behaviour now. Nifty has reached a cluster of resistance and hence aggressive longs here are strictly avoided.
Going ahead, traders are advised to take one step at a time and should follow strict stop losses for existing trades. Now, as far as levels are concerned, for the coming session, 11150 followed by 11100 would be seen as a strong support zone and just to highlight, a move below 11050 should be treated as a short term trend reversal. On the flipside, 11300-11350 has become a strong resistance zone. Only a move beyond these hurdles would extend the rally in coming days. But for it to happen, banking space needs to contribute heavily, otherwise, the possibility is very low. The only encouraging thing in today's session was the outperformance of the midcap basket. Hence, one should focus on such potential candidates."