Rising COVID-19 cases spooks market participants, financial became the culprit : Angel Broking
(Time Zone: Arizona, USA)
Market Wrap Up by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):
"We started proceedings for the week on a sluggish note today morning as indicated by the SGX Nifty. The corrective move extended in the opening trades to test the 14800 mark. However, this correction eventually turned into a sell off as we saw the index literally falling like a pack of cards at the stroke of the first half an hour. Within a blink off any eye, we were considerately off highs to enter a sub-14500 territory. Fortunately, the fall arrested around the mid-session and thereafter we had a modest recovery to trim some part of early losses. At the end, Nifty managed to reclaim 14600 by concluding the session with more than one and half a percent cut.
Last Thursday when we concluded the truncated week, things were bright and participation was good across the board. But developments over the weekend with respect to COVID-19 seems to have dented traders'/ investors' sentiment and as a result, we had a sharp selloff in the first half today. The Dow futures and few Asian bourses were trading quite firm; but this became like an illusion for our traders as we kept sinking right from the word go. The major culprit in today's fall was undoubtedly the financial space and it's now placed at a major support zone, which can now be treated as a 'Make or Break' level for the BANKNIFTY in the near term. So, from here on all eyes would be on the banking index as it can become a deciding factor for the near term trend. If it manages to hold this, we can see some recovery in the market; however the way things are positioned, a breakdown in the financial space can lead to extended correction in the market.
As far as levels are concerned, we had mentioned how important it is for Nifty to surpass 14900 in order to regain strength. Unfortunately, this didn't happen and we slid from the sub-14900 levels only. Today's late recovery was mainly led by the IT heavyweights, but it cannot single-handedly lift the market higher continuously. Till the time banking does not participate, the bounce back will not be sustainable in Nifty and hence, for the coming session, 14680 - 14750 are to be seen as immediate hurdles. On the flipside, 14550 - 14440 are to be considered as supports. Traders are advised to stay light and avoid taking contradictory bets till the time volatility does not subside."