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ITC becomes the spoilsport post its earnings: Angel Broking

“It seems that markets are a bit unsure about their near term direction. One day we see index trading with immense strength and then there is no follow up move. Post recent breakout from a ‘Diamond’ pattern, index consolidated for few days. Monday’s close above 10950 kept the hopes alive. But, today’s sharp selloff in ‘ITC’ post its quarterly numbers has poured complete water on it. Within last 45 minutes of trade, we are back to the previous breakout points of 10830.
 
Today’s tail end correction certainly does not bode well for the bulls. As an optimist, one must hope not to have any kind of follow through selling tomorrow. Hence, all eyes would now be on key support zone of 10800 – 10770. As long as we are convincingly above it, there is no major reason to worry for. But a sustainable breach of this support would aggravate the selling momentum in our market to have an extended correction. On the flipside, 10864 followed by 10905 would be seen as immediate hurdles. Going ahead, banking index plays a major role in order to dictate the near term direction for our market. Today’s correction was not an encouraging sign and hence, if market has to remain at elevated levels, few heavyweights like, HDFC bank, ICICI bank and Axis should step up now.
 
At present, it would be a prudent ploy to stay light and keep a close watch on above mentioned scenarios.”

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