Still skeptical on this extended move, keep booking index specific longs: Angel Broking

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

"Today's session was certainly a breather after seeing a spectacular rally in last 3 - 4 sessions. In line with global cues, the index opened with a mildly positive bias tad above the 9900 mark. However, somehow index failed to sustain at higher levels mainly on the back of some profit taking seen in selective index heavyweights. Eventually, a modest recovery in the latter half led to flat close tad below the psychological level of 9900.

At present, we are undergoing a typical phase in the market wherein you are stuck with your view and movement seen in the market does not give any comfort to ride the tide. Some observations with a slightly broader view are still holding us back. Hence, we need to keep our rigidity intact and let go these extended moves as we generally see such kind of euphoric moves in the latter stage of any rally. It's always better to be safe than sorry. As far as index view is concerned, we continue to remain cautious on the market and would advise staying light in the market (index specific longs should be booked). However having said that, one should not be ignoring the kind of spectacular trading opportunities individual stocks are offering.

On daily chart, we can see yet another candlestick pattern which resembles a 'Hanging Man' pattern precisely at 127% retracement of the previous up move from 9448.75. Since, we are a bit cautious, maybe we are more inclined towards finding for such bearish patterns or resistances in the market. But, as mentioned previously, you never know, market can surprise at any point of time while experiencing such euphoric extended moves. Going ahead, 9900 - 9920 would remain to be the levels to watch out for in the upward direction; whereas, on the lower side, 9845 - 9778 would be seen as immediate support levels."

Source : Equity Bulls

Keywords