Market at the corridor of uncertainty: Angel Broking
“Today’s gap up opening was clearly a follow up move of yesterday’s strong rally. Also, the global peers did not give any kind of disappointment as they were trading firmly in the green. Post the opening, index consolidated for a while and there was some momentum seen during the midst of the session which pushed the index well above the 10800 mark. However, a decent profit booking in the latter half resulted into a close tad below the opening point; eventually concluded with gains of half a percent.
Despite lot of uncertainty, last three sessions have been good for our markets. For the day, we had mentioned a crucial range of 10800 – 10833. Today, index saw some profit booking precisely after testing the higher end of the range. Let us understand why this level has some significance? On the hourly chart, we had a breakdown from this crucial swing low on December 05. Hence, this previous support is now acting as a resistance. Secondly, we can see a convergence of two important trend lines on daily chart precisely around the same level. Hence, unless we see Nifty breaking out convincingly from this wall, traders should avoid aggressive bets in the market. However, having said that considering the broader market participation, we will not be surprised to see it happen soon. Post the breakout, we may see further leg in the upward direction getting unfolded towards 10940 and above. On the downside, 10749and 10700 are now seen as key support levels.”