Stellar move from the midcap index: Angel Broking
“This was certainly an eventful day for our markets and importantly, whatever action happened pre and post market opening, it was only on the domestic factors. Yesterday, exit poll numbers and RBI Governor’s Resignation which was announced in the evening had an adverse effect on today’s opening. We started proceedings significantly lower; but index did not extend this weakness. In fact, a good broad based buying throughout the remaining part of the day trimmed complete losses to conclude the day with gains of nearly six tenths of a percent.
Keeping all developments aside if we just have to analyze the price action, one would interpret this as a promising day for our markets. Today’s close precisely coincides with the 61.8% Fibonacci retracement of the recent up move. In addition, the other heavyweight index (Bank Nifty) managed to reclaim its position above the 200-day SMA, which certainly bodes well for the bulls. But the highlight of today’s trading action was the smart rally in ‘Midcap’ index. We saw sheer outperformance from this basket right from the word go and eventually it went on to close with a good two percent gains. Considering all these evidences, we will not be surprised to see this rally extending towards 10620 – 10704 over the next few sessions. However, since lot of events hovering around us, one need to be very watchful and should ideally stay light on positions.
For the coming session, 10567 should be seen as a key resistance and a sustainable move beyond this would extend the move towards above mentioned resistance levels. On the downside, 10494 and 10450 are likely to provide some support.”