Global weakness leads to some profit taking: Angel Broking
Daily Market Wrap Up by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):
"Today morning, the global markets looked nervous and hence, we were about to open lower after yesterday's smart move. The SGX Nifty was indicating a start below 11500 with more than 100 points cut; but fortunately, Nifty did not open in line with what SGX was indicating. In fact, post the initial hiccup, markets stabilized and recovered a bit. However, the global weakness eventually weighed down heavily and we corrected towards 11500 around the midpoint. Post this, some volatile swings were witnessed in a range of 50 points to eventually conclude the weekly expiry tad above the 11500 mark.
Although, today's weakness in our market has to do with the global cues, we are not surprised with it. Yesterday, despite a strong tail end surge, we avoided longs and had mentioned the configuration of the 'Bearish Wolfe Wave' pattern on the hourly chart. The observation has certainly proved its significance today; but honestly speaking, today's correction was nowhere close to a sell-off, rather can only be interpreted as a small profit taking. But having said that we continue to remain cautious and still do not expect the Nifty to surpass the sturdy wall of 11650-11700 soon. Going forward, 11480-11450 would be seen as crucial support and a move below this would trigger some decent correction thereafter. Also, we would like to draw attention towards the 'US Dollar Index' which has corrected significantly in the last couple of months. Recently, this index has formed a base around the 92 mark and is now about to surpass the key hurdle of 93.60-94. Since US Dollar Index and Equity markets are inversely correlated, any surge in this would lead to correction in our markets. Hence, it is important to take a note of this development as well.
As far as individual movers are concerned, we did not see any broader market sell off today. There were a number of themes who were bucking the trend throughout the day. But we still advise caution and even if one wants to participate in such potential movers, avoid aggressive bets and look to book timely profits or exit if it does not turn out to be a favorable trade."