Last Friday, we saw a smart recovery to defend the 11,000-mark on a weekly basis.

Barring the last day of the past week, our markets kept sliding lower and didn’t respect any intermediate support in the process last week.

The velocity at which the market came off last week, it might have caught a lot of traders on the wrong foot.

But we were not surprised with it as we have been repeatedly advocating caution in the recent rally.

The way prices looked overstretched, reaching a cluster of multiple Fibonacci ratios and key indicators and importantly the positioning of the US Dollar index recently, we avoided participating in the last phase of the recent euphoria.

The cautious stance initially and then a ‘sell on rise’ has played out well so far.

In our sense, the market is not done yet and although we have seen a smart broad-based recovery on Friday, we expect the selling to re-emerge at higher levels around 11,150-11,250.

On the daily chart, we can see the confirmation of ‘lower top lower bottom’ for the first time since May lows.

Hence, the probability of Nifty sliding below 10,820–10,770 is quite high to test the next cluster of supports around 10,600–10,450.

However, with a broader view, we still believe that this is just a corrective phase within the large uptrend and thus, it is likely to provide a very good opportunity to accumulate quality propositions in a staggeredmanner.