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Below is the Daily Market Wrap Up By Mr. Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One Ltd

The SGX Nifty was indicating a pleasant start for the week in line with cheerful global bourses. However we did not open with the same positivity and in fact gave up all gains in the initial trades itself. As the day progressed, the selling augmented across the broader market to break all intermediate supports one after another. During the final hour, market managed to minimize the damage; but still ended the session with nearly a couple of percent loss.

With today’s correction, Nifty marked the weakest session in last eight odd months. Throughout last week, our market was feeling the pressure and kept sliding gradually towards the key support of 17700. Technically this level was important because it coincided with the crucial neckline support of bearish ‘Head and Shoulder’ pattern which formed over the past couple of months. With reference to our recent commentary, we had anticipated formation of this pattern and today finally it got confirmed as we convincingly closed below the neckline of the same. Today’s massive fall finally validates our recent cautious stance on the market. Today’s low precisely coincides with the daily ’89-EMA’ and generally we consider this as a sheet anchor for prices. But this time, we do not expect it to play similar kind of role for the market. We may see small rebounds since market is a bit oversold, but the possibility of extending this correction is pretty high. After 17250, the Nifty is likely to continue this weakness towards the psychological level of 17000; where one need to reassess the situation. On the flipside, 17500 – 17650 are now to be considered as immediate hurdles. Traders are advised to use in between recoveries to lighten up longs and don’t be in a hurry to make bottom fishing.

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