As long as the Nifty sustains above 11,036 levels on the closing basis, one can retain a positive stance, Mazhar Mohammad says.
The Nifty rallied in line with Asian peers but failed to hold on to those gains in the late trade on March 5 amid rising novel coronavirus cases and consistent selling by FIIs. The correction in European markets also weighed on sentiment.
It was a volatile session and the index closed off the day's high but could not hold 11,300 and formed a bearish candle on daily charts again, as the closing was lower than the opening level.
The index did not participate in but global rally, but it also did not break crucial support of 11,000. It closed above its five-day simple moving average.
These are pointers to volatility continuing in coming sessions but the downsides may be limited, as the index has already corrected more than 8 percent from its record high, experts say.
They asked positional traders with a high-risk appetite to take long side exposure in small quantities, with a stop below 11,030 on the closing basis.
After opening higher at 11,306.05, the Nifty remained volatile throughout the session. It touched an intraday high of 11,389.50 and a low of 11,244.60 before closing 18 points higher at 11,269.
"Albeit Nifty50 has given up intraday gains, which resulted in slightly longer upper shadow, hinting at a lack of conviction among the bulls to hold long positions. Technical indicators on lower time-frame charts started tilting in favour of the bulls as the Nifty registered a close above its 5-day simple moving average. Moreover, the study of Bollinger bands is suggesting that downsides from current levels may be limited, as the index is already stretched in the southern direction without leaving much room for a further fall from current levels," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in, said,
Apart from this consolidation, for the last 5 trading sessions, critical long-term averages and key trendline support should be read as positive signs that are likely to strengthen bullish sentiment, he said.
As long as the Nifty sustains above 11,036 on the closing basis, one can retain a positive stance, he said. However, strength in the indices shall emerge only on a close above 11,433, which can pave the way for a sustainable upside with an initial target of 11,536, he added.
The Bank Nifty also started off on a positive note and rallied up to 29,134.30 intraday but then slipped in the late trade. The index closed at 28,815.30, up 161.60 points, and formed a Doji pattern on daily charts, indicating indecisiveness among the bulls and the bears.
"The Bank Nifty needs to sustain and close decisively above 29,000 zone for the pullback trade to materialise. The index remains in the oversold territory and fresh short-selling should be avoided," Manav Chopra, CMT, Head Research-Equity at Indiabulls Securities, said.
Chopra said historically, 100-EMA on the weekly charts has acted as a strong support zone for the Bank Nifty and it is placed at 28,350.
Once the index manages to close above the resistance zone, recovery is likely to be very sharp and the index is likely to test 29,800-30,000 zone on the upside, he added.Time to show-off your poker skills and win Rs.25 lakhs with no investment. Register Now!
