A breach of 10300 confirms a breakdown: Angel Broking

By 03:38

NewsPatrolling.com: “The gap up opening was very much in-line with a strong overnight recovery seen in the US markets. However, the kind of bounce back was expected seemed to have adjusted in the gap up move. During the entire first half, Nifty consolidated around the 10400 mark; however, the second half turned out to be extremely brutal as we witnessed a complete nosedive to fall more than 200 points from morning high. Eventually, the Nifty ended the session well below the 10300 mark.
 
Index traded in a corridor of uncertainty throughout the first half; but, things became quite clear after breaching yesterday’s low 10323. This triggered massive sell off in the market and as a result, we witnessed a sharp fall of another 100 points within no time.  Now, Nifty has closed well below the trend line breakdown point of 10300, confirming further weakness towards the daily 200-SMA placed around10140. Going ahead, any bounce back towards 10300 – 10360 would be seen as a selling opportunity. This goes well with our near term directional view; but, yesterday’s Bank Nifty’s close whipsawed us a bit to expect a small relief rally. But, as we just highlighted, below previous day’s low, there were no doubts and we had to resume to our recent cautious stance. 
 
The banking index too confirmed its breakdown and is now poised for further weakness towards 24200 – 24000 levels. Hence, the possibility of some bounce back has now been negated. Going ahead, 24600 – 24800 would now be seen as immediate hurdles. Having said that it would be very interesting to see how PSU banking basket behaves as the ‘Nifty PSU bank’ index has closed around its major support level of 2928. Hence, traders need to keep a close eye on this development as well.”
 

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