IGI Logo

Below the "Market Wrap Up" by Mr. Rajesh Bhosale, Technical Analyst at Angel One Ltd

Nifty surrenders early gains, settles marginally in the red after a 7-day winning streak

After a milestone close just below the 20000-mark, Nifty began the day with a robust gap-up opening. Nevertheless, right from the outset, there was widespread profit-taking, leading to weakness in the early hours of trading. Eventually, certain IT stocks and market heavyweights stepped in, limiting the extent of profit-booking in the benchmark index. Amidst this eventful day, the Nifty concluded without any significant changes from the previous close, remaining slightly below the 20000 mark.

While everything looked ‘Hunky Dory’ based on yesterday's closing, today served as a reality check for some complacent traders. Although there were no significant shifts in the index, there was notable profit-taking in midcap and small-cap stocks, which dampened market sentiment. With the undertone of bullish sentiment, there were clear indications of index management, with key heavyweights preventing the market from declining significantly. While no signs of a trend reversal are evident, maintaining a positive approach is advisable, albeit with expectations of increased volatility. In such a scenario, traders should consider a strategy of buying on market declines and taking profits at higher levels. The key support zone lies at 19900–19800, while the immediate resistance zone is in the range of 20160–20200. Traders should closely monitor these levels and make trading decisions accordingly.

Although profit-taking in small and midcap stocks may be disheartening, their recent performance has been astonishing. Going ahead, similar performance may not be possible, necessitating a selective approach in this basket in the short term. As emphasized earlier, the focus for stock-specific trading should primarily be on leading stocks that are considered safe bets and are likely to provide opportunities for outperformance.

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