Don’t worry! Market had a much-needed pullback: Rahul Sharma, JM Financial

economictimes.indiatimes.com:

Rahul Sharma, Director & Head — Technical & Derivatives Research, JM Financial Services, says “for the next couple of days, the market may face volatility. Weak hands are probably out of the market in yesterday's correction. Having said that, there are two levels to keep an eye on. One is 20,950; we reversed 25 points from that level in the morning, in the first half of the trading session today. So that remains a crucial support and that is where the put writers are also present both in the weekly as well as the monthly expiry.”
Do you think there are any chances of visiting the morning lows or does it appear that the station has been taken out and now we are looking at higher levels?
So two things. Yesterday's correction was more like the boy who cried wolf. Everybody was expecting that, it would be the FIIs who are selling at the year-end, booking profits, closing their books at a record high, etc, etc. But the data just does not prove that. In fact, they have added longs in index futures, they have added longs in stock futures on a down day. And even the cash figure, the sell figure was hardly anything to be worried about.

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So my reading is this is just a knee-jerk reaction to the extremely overbought condition that we were in. On the way up, we rallied almost 3,000 points, we did not ask questions and this correction also is something where the kind of fear that was there yesterday, India VIX was at a multi-month high, the kind of liquidation we saw in mid-caps and small