Market at crucial juncture, 10800 – 10850 to watch out for: Angel Broking
“We had a gap up opening to begin the trading for the week. The global set up was just perfect for such kind of head start. Subsequently, index saw some profit booking in the initial trade to fill the complete gap. However, post some consolidation, strong buying emerged at lower levels which continued till the last minute of the trade. As a result, the index went on to gain three fourth of a percent to conclude the session tad above the 10750 mark.
Today, our benchmark index (Nifty) closed at an interesting point. It is interesting because most of the traders left clueless whether they should carry their longs or just to take the money off the table. Since last couple of weeks, we have been eyeing this zone of 10750 – 10850, which coincides with the 200-day SMA, 89-day EMA and the gap area created on October 04, 2018.
We have been quite vocal on index continuing this relief move towards the important junction. The Nifty is now finally at this point; but the kind of gush we saw towards the fag end, it has left us in two minds now. If we keep all things aside and just have to comment looking at charts, then we would not hesitate to call it as a strong signal. There is high probability that the index would take out this the hurdle of 10800 – 10850 and move higher. But, since it’s a crucial deciding level, we would rather see how index behaves tomorrow. If it continues to remain above 10800 – 10850, then traders should gear themselves up for further move. On the lower side, 10700 followed by 10650 would be seen as key supports.
The banking index remained quiet throughout the day. Hence, if Nifty has to extend this move then banking index needs to step up now. Also, the midcap index has been showing some interesting movement of late. Since last 6 – 7 days, it’s been struggling to overcome the 89-day EMA. If it manages to break out from this multiple high zone, traders would get decent opportunities going forward.”