The Nifty recovered sharply from the day’s low in the last couple of hours of trade to snap a four-day losing streak on March 8.
The index formed a bullish candle on the daily chart, as the closing was higher than the opening level. The positive trend in European markets and broad-based buying supported the sentiment.
The intraday low of 15,671, from where the index bounced back to surpass the 16,000-mark, is expected to act as the near-term support.
If the index sustains above it and closes above the crucial hurdle of 16,133 in the coming days, the possibility of moving towards the 200-day exponential moving average is highly likely, experts said.
The volatility also cooled down but not enough to support the bulls. India VIX, the fear index fell 2.5 percent to 28.59. It has to correct further to drop below 20 mark for stability in the market, experts said.
Also read: Gainers & Losers: Five stocks that moved the most on March 8
The Nifty opened gap down at 15,748 and extended correction to hit the day’s low of 15,671, the lowest level since July 28, 2021.
It, however, recovered smartly in the last couple of hours and settled at 16,013.5, up 150 points.
“The Nifty50 seems to have reversed its course of direction as it smartly recoiled from the intraday lows of 15,671 levels. Interestingly, for the last 33 trading sessions, this counter is moving in a downsloping channel and Tuesday’s reversal occurred after testing the lower boundary of the said channel,” said Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia.
Moreover, around 15,800, the index has good support on the medium-term charts. If it sustains above 15,671, the index may stage a decent pullback swing, Mohammad said.
Also read: Market corrects 16% from record high but these 115 stocks suffer 30-66% drop
In the near term, 16,133 could be the hurdle. A close above 16,133, can extend the pullback swing to 200-day exponential moving average placed at around 16,700.
For the time being, positional traders with a high-risk ability can create long positions, preferably on the dip with a stoploss below 15,670, he said.
On the options front, maximum Call open interest was seen at the strike price of 18,000 followed by 17,000 while maximum Put open interest witnessed at a strike price of 16,000 followed by 15,500.
Marginal Call writing was seen at 16,300 strike price followed by 16,500 while marginal Put writing was seen at 15,500 strike price followed by 15,700 strike. All these option data points suggested that 15,500 to 16,500 levels could be the range for Nifty in coming sessions.
Also read: Despite steep correction, India’s valuation premium to EM peers at record high
The Bank Nifty also opened negative at 32,532 and slipped to the day’s low of 32,155. The last hour of the day saw a good recovery and the index managed to close 287 points up at 33,158.
It formed a bullish candle on the daily scale. “It can witness a bounce towards 33,500-34,000 levels if it holds above 33,250, whereas support can be seen at 32,500 and 32,250 levels,” said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
On the stock front, L&T Technology Services, Tata Power, Sun Pharma, Ipca Labs, Mindtree, L&T Infotech, Indian Energy Exchange, Coforge, TCS, Tech Mahindra, Cipla, Tata Chemicals, Indian Hotels, Infosys, Wipro, Mphasis, HCL Technologies, Trent and Petronet LNG had a positive setup. Weakness was seen in Hindalco Industries, ONGC, Motherson Sumi and Page Industries, said Taparia.
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