The recovery seen in the last one hour of the trade helped benchmark indices recoup some of the losses on April 19 but the Sensex failed to go past 48,000, while the Nifty managed to close above the recent swing low of 14,250, which is a positive sign.
Finally, the Sensex fell 882 points to 47,949, while the Nifty50 closed with losses of 258 points to 14,359.
Sectorally, selling pressure was seen in realty, capital goods, public sector, and power stocks, while some buying was seen in the healthcare space.
“Domestic markets nosedived as surging COVID-19 cases and the imposition of restrictions continued to fan investor worries. Increasing restrictions are forcing investors to reconsider the current valuations. Further, the banking sector pressured the market due to rising concerns over asset quality,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.
“As investors remain focused on the rising COVID-19 cases, the market will continue to ride on volatility. We can expect stability as daily cases fall in the coming weeks due to lockdown, completion of state elections and immunity with vaccination,” he said.
Here is what experts suggest investors should do on April 20:
Ashis Biswas, Head, Technical Research, CapitalVia Global Research Limited
The Nifty witnessed some swift recovery from its short-term support of 14,300. The index is expected to trade in the 14,300-14,500.
The market breadth recovered significantly after a gap down opening. Momentum indicators are recovering from oversold reading, the market will consolidate in the short term.
Rohit Singre, Senior Technical Analyst at LKP Securities.
The index opened the day with strong cuts but in the second half showed decent pullback and closed at 14,365 with a loss of nearly two percent.
The index has formed a hammer candle pattern on the daily chart, which indicates that if current levels are held, we may see some positive reversal in coming sessions.
A strong base is still at the 14250-14200 zone and if the Nifty manages to hold it, then good recovery is possible towards the immediate hurdle zone of 14,450-14,550 zone.
S Ranganathan, Head of Research at LKP Securities
The pharma was the only positive index last week. April 19 saw a continuation of that trend as pharma stocks stood tall in a weak market, marred by rising coronavirus infections across states.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
We did not break 14,200-14,250 on a closing basis and hence the onset of a bear market cannot be confirmed. This patch is good support for the Nifty and if we disrespect this, we can drift to 13800-13900.
Since the upside is capped at 15000, a view on the long side can be only be taken post that level. Until then, the index will remain sideways with a downward bias.
Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services Limited
The Nifty finally settled with losses of around 260 points but technically, it formed a Bullish Hammer candle on a daily scale, as it closed higher than its opening zone which indicates that declines are being bought.
Now, it has to cross and hold above 14,400 to witness a bounce towards 14,600 and 14,700. On the downside, support exists at 14,250 and 14,200 zones.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.