Banking drag indices lower at start of the week: Angel Broking
Market Wrap-up by Mr. Ruchit Jain (Senior Analyst - Technical and Derivatives, Angel Broking):
"Nifty started trading for the week marginally negative above the 11050 mark. However, it corrected from the opening ticks itself and crept lower throughout the day to end below 10900, with a loss of over 180 points.
During end of last week, the index had indicated some signs of profit booking and we witnessed a continuation of the correction in Nifty in today's session. The Bank Nifty index, which had recently seen a relative under performance, continued to be the culprit to drag the index lower. If we look at the recent historical data, Nifty had given a range breakout during mid-July above the resistance of 10890. After a move upto 11340 post the breakout, the index has seen a pullback move and is now back to that level. As per the role reversal technique in technical analysis, such previous breakouts usually act as support on pullback moves and this also coincides with the '200 SMA' on the daily chart. The index has ended in the vicinity of the support range of 10870-10900 and thus, we could again see some pullback if this support holds its importance. Below this, the hourly charts implies intraday support around 10800 mark. However, one should also keep a tab on the Bank Nifty index without which a meaningful pullback in Nifty would be difficult. Traders are advised to avoid forming shorts at current zone as there are multiple supports seen. The intraday resistance in Nifty for the coming session is seen in the range of 11000-11050.
Inspite of the negative momentum in the index, the overall stocks specific action was quite mixed and the market breadth was infact marginally positive. The Pharma space kept buzzing with the midcap names from that space joining the momentum and the Nifty Midcap index too showed relative outperformance to the benchmark. Hence, trading with a stock specific approach would provide better opportunities and hence traders are advised to capitalize on the same."