“At high valuations the market is vulnerable to sharp corrections and this happened yesterday”, says V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Two trends are important: one, the correction in mid and small-caps is almost double the correction in large-caps; two, DIIs turned big buyers towards the end of the trading day, he said.
The vulnerability of the mid and small-caps to correction remains since the valuations are excessive. Large-caps will witness buying on declines, he said.
Investors can wait for the market to stabilise and buy high quality large-cap stocks on declines, he said.
Vaishali Parekh, Vice President – Technical Research, Prabhudas Lilladher said Nifty after remaining in the positive zone near 21,500 levels in the initial half tanked post lunch session with heavy profit booking witnessed to produce a huge bearish engulfing candle pattern on the daily chart ending near 21,150 levels to weaken the sentiment and turning the bias to cautious mode as of now.
With near-term support maintained near 20,800 zone one needs to wait and watch for things to settle down and confirm a clarity for further development. The support for the day is seen at 21,000, while the resistance is seen at 21,300, Parekh said.
BSE Sensex is up 51 points at 70,558 points. Powergrid, HDFC Bank are up more than 1 per cent.
