Crucial supports and trend reversals for near term is placed at 8860 and for short term is placed at 8690 :: HDFC Securities

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Volatile Derivative Expiry. Day’s action formed a bull candle with good volumes which indicates bulls are remaining with positive momentum. Technically, index has mildly breached the earlier day’s low like a noise and stayed within the previous candle which indicates the continuing battle between bulls and bears. Index is hovering at the 100% projection level and medium term upper trend line, this is crucial phase for bulls and one should be more cautious in creating aggressive longs. Though the trend remains up, the upside room is limited to 8990 – 9040 levels. Crucial supports and trend reversals for near term is placed at 8860 and for short term is placed at 8690. If index slides below 8860 then traders are advised to book serious profits in most of the holding stocks except larger cap defensive stocks. As per Elliot wave, we are in internal “wave iii” of an impulse, a break below 8860 we could confirm that “wave iv” has begun for the target of 8795 – 8730 (Gap support). After this minor correction price could visit once again towards the upper trendline. Again weak market breadth in the rally and inter market divergences have been witnessed which indicate index is preparing for next big move either side, we are waiting for the weekly close to see the further picture.

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