Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking
The global set up was just ideal today morning to have yet another gap up opening in our market at fresh record highs. Subsequently, index went into a consolidation mode for the remaining few hours.
But the buying momentum accelerated at the stroke of the mid session to conclude the Nifty convincingly above 13500 by adding another percent to the bulls' kitty. Our markets reached yet another milestone of 13500 with ease and banking as well as Reliance were the major charioteer of the move today.
Since we are in an uncharted territory, sky's the limit for our market; but in our sense, we have now reached the extreme most zone, at least for the current vertical move. With a broader view, 14000 and beyond levels are very much possible, but for a time being, 13500 - 13600 are the extreme levels as per few fibonacci ratios. Let's see why these levels are considered important. The 'Golden Ratio' (161%) of the 'Price Extension' of the previous up move is placed at current levels. This level coincides with the 'Multi-year Upward Sloping Trend Line', drawn by connecting all important highs from March 2015 on the monthly chart. Hence, some profit booking around these levels cannot be ruled out.
Yes, we agree to the fact that a strong trend up or down, doesn't necessarily follow any theory. But there is no harm being a bit conservative at times. Hence, since the last 3 - 4 days, we have been continuously advising booking profits in the rally and avoiding aggressive bets overnight. As far as support levels are concerned, 13449 - 13375 would now be seen as key points. (Share Manthan, December 09, 2020)
