Nifty back to 14500, financials leading the fall : Angel Broking
(Time Zone: Arizona, USA)
Market Wrap Up by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):
"Markets had a nervous start on Monday as we saw Nifty sliding below the key support of 14900 to even test sub-14700 levels. However, at the midst of the week, we witnessed a v-shaped recovery in the market post some dramatic events. Everything looked hunky dory as the February series ended convincingly above the 15000 mark. But market was not done with its twists yet as we saw a huge gap down on Friday on the back of weak global cues. The selling augmented as the day progressed to eventually mark biggest single day loss in last couple of months.
The one who follows 'Technical Analysis', gives more weightage to the price action and importantly it's the closing point that matters the most than a starting or in between activity. If we relate this concept to the price action in the week gone by, we did see some healthy recovery at the midst; but all this positivity eventually went for a toss on Friday. Fortunately, we did not get carried away by the intra-week rally and waited for the convincing move beyond 15200 to change our stance. Market failed to surpass it and in fact, with a massive broad based sell off, Nifty has sneaked below its recent swing low of 14635.05 on a closing basis. This led to a confirmation of first sign of trend reversal in the form of 'Lower Top Lower Bottom' on the daily time frame chart. The weekly chart already showed some exhaustion in the previous week as we observed fatigue around the strong resistance zone of 15380 - 15500 (which is the 161% 'Golden Ratio' of the entire fall from Jan'20 highs to March'20 lows).
Looking at the price structure, we expect this correction to extend towards 14200 - 14000 levels first. Here, 14000 would be seen as crucial 'Trend Line' support and a breach of this would open up further space towards 13700 - 13500. Hence, we would be closely observing how index behaves around 14000 in the forthcoming week. For us, the short term tide has turned downwards and the view will remain intact as long as 15200 is not broken. On the immediate basis, 14750 - 14920 are to be seen as stiff hurdles. Traders should not get intimidated if all the above mentioned scenarios turn into a reality because the larger degree uptrend is still very much intact. Since a long time, market has not seen any major correction, so this should only be construed as a much awaited profit booking or a short term corrective phase which is healthy in the longer run. Momentum traders should avoid aggressive or leveraged longs for a while; rather use decent declines to accumulate quality propositions with the broader view."