Reminder of penultimate week’s correction, stay light
“For the third consecutive day, our markets had a positive opening in-line with SGX Nifty. This was followed by an immediate upmove and then a consolidation throughout the first half. However, a strong bout of selling in the latter half dragged the index significantly lower from day’s high to conclude the session below the 10000 mark.
With reference to previous articles, we are not so surprised with the corrective move we witnessed post the midsession. In fact, the velocity at which it came down was certainly intimidating; reminding of a sharp correction we saw during the penultimate week. This was one of the main reasons we avoided participating in index specific longs. Technically speaking, today’s high of 10067.35 almost coincided with the 78.6% retracement of recent down move. Going ahead, this level would be seen as a strong hurdle and the way it has closed today, a possibility of further weakness is on cards now. For the coming session, 9950 – 9880 levels are likely to be tested and hence, traders are advised to stay light on positions.”