Daily Market Wrap Up
“Despite subdued global cues, today’s gap down opening (in Nifty) was mainly on the back of index heavyweight ‘ITC’ tumbling more than 10% in the pre-opening session. We saw some attempt of recovery in Nifty in the midst of the session; but, rub off effect (of ITC) was being witnessed on the broader market in the latter half, which eventually pulled the index below 9850 on a closing basis.
In last few days, we witnessed a smart rally in index after breaking previous hurdle of 9710. However, we maintained our cautious stance on the market and have been advising booking profits in this rally. Today’s surprising gap down opening followed by some correction seems to have justified our view to some extent. As mentioned previously also, correction in a euphoric market generally surprises us and then it becomes very difficult to exit our existing longs as the velocity of such corrective moves can be threatening. Now, index has closed tad below the ‘5 EMA’ on daily chart, indicating weakness to continue. In addition, the ‘RSI-Smoothened’ readings are still hinting towards the possibility of some correction in the market. Thus, any bounce back towards the intraday resistance levels of 9860 – 9880 would remain to be an exit opportunity as we can see this corrective move getting extend towards 9770 – 9740 levels.”