Avoid aggressive positions in this market: Ruchit Jain

Where are we?
The market continued its splendid run and now is showing some signs of exhaustion at higher levels. During the last week, Nifty saw some profit booking after entering the strong resistance zone of 10,482–10,500 which was the 161 per cent (Golden Ratio) reciprocal retracement level of the recent down move.

What is in store?
An impulsive upmove in the index is usually followed by a corrective phase; wherein the correction either turns out to be a time-wise correction or a price-wise correction. The index has completed an upmove near its resistance zone of 10,482-10,500 and has then showed a corrective phase during the week.

In the coming week, we expect this corrective phase in the index to continue wherein stock specific momentum would provide better trading opportunities on both side of the trade.

What could investors do?
For the coming week, the immediate support for the Nifty index is placed around 10,260, which if breached could drag the index upto 10,180(38.2 per cent retracement level of the recent rally and the previous breakout level). On the flipside, the resistance is seen around 10,380 followed by the recent high. Traders should not take aggressive positions in the index and should rather keep focusing on individual stocks with a proper exit strategy.

(The writer is Equity Technical Analyst at Angel Broking)