IGI Logo

Below is Quote on Market Wrap Up 21 July 2023 By Mr. Rajesh Bhosale, Technical Analyst at Angel One Ltd

                               Sell off in Reliance and IT space applies brakes on the recent run

During the week, the bulls had a strong run, leading to a substantial rally of over 400 points until Thursday. However, weak guidance from IT giant INFY triggered profit booking in the IT space, and profit booking in Reliance caused a price correction on Friday, cooling off significantly from Thursday’s high. Eventually, Nifty ended the week with a 0.92 percent gain, tad below 19750.

Despite the impressive weekly winning streak for the fourth consecutive week, profit booking in key heavyweights on Friday slowed down the bull run. The market's tendency to catch complacent traders off guard was previously highlighted in our outlook, emphasizing the need to avoid undue risk. Nevertheless, the market saw some respite at lower levels on Friday, and individual counters continued to perform well, reflecting an inherent uptrend. The market's recent multi-month breakout around the 19000 level indicates a significant bull run. However, due to the recent vertical move and overbought conditions, the next upward movement may not be as swift as the recent run. It is anticipated that there may be a correction, either in terms of time or price, so the ideal strategy would be to buy on dips and book profits at higher levels. The psychological mark of 20000 that was just missed during the week remains an immediate hurdle, followed by the golden retracement target of 20100 – 20200. On the downside, the recent congestion breakout level of 19600 – 19500 is considered immediate support, and a more significant correction may occur only if this level is breached. Traders should closely monitor these levels and consider playing within this range.

Some recent performers like Reliance and the IT space faced downward pressure on Friday, and many sectors have already participated in the recent run. Going ahead, finding the right theme for momentum moves may become challenging, but pockets of outperforming opportunities might continue to emerge, especially considering the result season. Traders should focus on such opportunities.

Above views are of the author and not of the website kindly read disclaimer