Expect further correction in the market: Angel Broking

Daily Market Wrap Up by Mr. Sameet Chavan (Chief Analyst-Technical and Derivatives, Angel Broking):

Technical Outlook

After an extended weekend, trading began with a marginal gap as indicated by the SGX Nifty. However, a strong selling pressure in the initial hour dragged the index significantly lower to close with a cut of 0.66% over its previous close. The banking conglomerates were among the major culprits in today's weakness.

Today's correction was no surprise as market hinted towards it on Friday. The only required development was the breakdown below the important support zone of 9580 - 9560. A breach of this support was the trigger point for today's correction and in the process, the Nifty sneaked below the 9500 mark. However, some recovery pulled it back above this psychological mark; but now, with todays price action, a 'Lower Top Lower Bottom' has now been confirmed on daily chart for the first time in last six months. This certainly does not augur well for the market. In addition, the (daily) 'RSI-Smoothened' has broken its important support values, which we believe would provide impetus for this corrective move. Going forward, we may see a bounce back towards 9560 - 9580; but, now this attempt should be used to exit longs as we expect this correction to extend towards 9420 - 9340 levels. Recently, we started advising traders to stay light and use rallies to exit longs with a short term perspective, this view still remains valid as we expect some jittery moves in the market.

Source : Equity Bulls

Keywords