After The Bell: Nifty recovers smartly to reclaim 14,600, what should investors do on Tuesday?
The Indian market that opened with a gap on the downside on May 3 managed to recoup losses and closed mixed. The Nifty reclaimed 14,600 to close three points higher at 14,634, while the S&P BSE Sensex slipped 63 points to 48,718.
“The domestic market bounced back from its early losses to trade flat owing to global cues and strong buying seen in FMCG and metal stocks. Financial stocks were the top laggards due to weak results of mid-sized banks and NBFCs, while buying interest was seen in smallcap stocks,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.
“India’s manufacturing PMI data in April was flat at 55.5 with a mild change from March’s data of 55.4 percent mainly due to pick up in international demand for Indian goods,” he said.
Sectorally, buying was seen in telecom, metals, FMCG, and power space while consumer durables, energy, banks, oil & gas and realty saw profit-taking.
Broader markets also closed mixed. The S&P BSE midcap index rose marginally but the smallcap index gained more than a 1 percent.
Here is what experts suggest investors should do on May 4:
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
The Nifty had entered a minor degree correction towards the end of the last week. Continuing with that, the index opened gap down. It attempted to extend below 61.8 percent retracement of the recent rise, however, there was no follow-through selling.
On the contrary, the bulls rushed in to provide support and stretched their arms towards the end of the session. As a result, the index witnessed a smart recovery and closed in the green eventually.
The index is expected to continue to recover and likely to surpass the 15,000-mark in the short term. On the downside, the day’s low of 14,416 will act as crucial support.
Rohit Singre, Senior Technical Analyst, LKP Securities
The Nifty opened with a strong gap down but managed to recover all the losses in the second half to end the day at 14,634 and formed a bullish candle on the daily chart.
The overall structure still looks cautious as the index is still trading below 14,800. On the higher side, the index has a stiff hurdle at the 14,720-14,800 zone.
Profi- booking is suggested around the said levels and a fresh breakout above 14,800 should be considered as a buying opportunity. On the downside, good supports are placed at the 14,550-14,500 zone.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
The support of 14,400 was well respected. The index took a sharp U-turn from that level to revisit the resistance of 14,700.
If the index gets past this level and stays above it, it can move towards 15,100. If it breaks 14,400, the Nifty can slip further to 14,100.
Chandan Taparia, Vice President, Analyst-Derivatives, Motilal Oswal Financial Services Limited
Technically, the Nifty formed a bullish candle on the daily time frame as it closed higher than its opening zones and reclaimed its 50 DEMA.
Now, the index has to hold 14,600 to witness an up move towards 14,800 and 14,880 zones. On the downside, support exists at 14,500 and 14,400.
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