Euphoric move finally pauses with a sharp u-turn: Angel Broking
(Time Zone: Arizona, USA)
Market Wrap-up by Mr. Ruchit Jain (Senior Analyst - Technical and Derivatives, Angel Broking):
"Nifty started the day with a gap down following the negative global cues. However, the index recovered the losses post opening and even surpassed yesterday's high till noon. But then, the index again witnessed a gradual sell off and it breached the morning lows to end the day at the lowest point with a loss of more than 160 points.
Today, finally some brakes were applied to the recent momentum as the global markets witnessed some profit booking. Nifty recovered post a gap down opening but the recent outperforming banking index was trading with a negative bias. Post noon, we then witnessed a profit booking and both Nifty and the Bank Nifty corrected for the rest of the the session to apply brakes on the recent euphoric move. Today's move in the indices (especially Bank Nifty which corrected from its important resistance zone) just seems to be a profit booking after the recent relentless upmove. Considering last three day's price action, 13000 now becomes the sturdy wall for Nifty to surpass. When we see such profit booking, the index usually retraces some of the previous upmove before resuming its primary trend. Hence, we could see a retracement of the recent move from 11535 to 12963 of which the minimum 23.6 percent retracement level is placed around 11630. If this pans out to be just a time-wise correction, then the index could see some consolidation around the mentioned retracement support before resuming its uptrend.
From a day trading or short term trading perspective, such corrections provide opportunities on both the sides of the trade and thus, traders should look out for such trading opportunities and have a proper exit strategy as well. However, we are still witnessing some good price volume action in the broader markets and hence, any declines should provide a good entry points for positional traders to accumulate shares on dips."