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

After yesterday’s sell off, our market started the day on a weak note as indicated by the SGX Nifty early in the morning. Things looked extremely bleak in the opening trades but fortunately the bears chose to take some breather after nearing the support zone of 17250 – 17200. In fact, as the day progressed, the overall recovery in the market gained some momentum to reclaim the 17500 mark.

Nifty might have gained only half a percent from the previous close; but today’s session was full of action as we first witnessed a correction which was then followed by a decent rebound across the board. Today’s low precisely coincided with the daily ’89-EMA’ support which we had mentioned in our previous commentary as well. Since market was too oversold some respite was evident and this is exactly what we witnessed throughout the day. Despite this, we still remain cautious on the market and construe this as merely a technical rebound. It’s better not to get carried away by these intermediate recoveries because we are still not out of the woods yet. For the coming session, 17550 – 17650 is to be seen as stiff hurdle and ideally it would be a prudent ploy to lighten up longs if Nifty extends today’s bounce back. On the flipside, 17200 has now become a sacrosanct support for the Nifty. Although we expect it to be breached soon, it would be difficult to take a call whether it will happen in next two days as we are approaching the November expiry.

Our inclination remains on the bearish side and hence, it’s advisable not to be in a hurry to do any kind of bottom fishing at this juncture. The midcap index too had a sharp recovery but if we take a glance at the daily time frame chart, we can see it giving a precise pull back towards its trend line breakdown point. Such recoveries should be used to lighten up longs.

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