Intraday traders should remain neutral for the next session, whereas a strong rally towards 11,450 can be considered to create fresh positional shorts with a stop above 11,500, say experts.
Indian markets ended in the green on September 7 after two days of losses, with the S&P BSE Sensex rising 60 points to close at 38,417 while the Nifty50 gained 21 points to end at 11,355.
The Nifty found buying support near 11,250 levels. It reclaimed 11350 levels while the broader markets underperformed to close in the red.
Sectorally, action was seen in IT, metals, consumer durables, and pharma stocks while profit-taking was seen in realty, utilities, and oil & gas stocks.
The Nifty50 appears to have taken support around 62 percent retracement levels of the rally from the lows of 10,882-11,794 level.
Technical experts are of the view that 11,300 is an important support for the index. As long as it trades above 11,300, the market is likely to trade in a range while the upside is likely to remain capped near the 11,450-11,600 level.
“Unless the Nifty closes below 11300 levels, going forward the trajectory for the next few days can be sideways with a slightly positive bias with upsides remaining capped in the bearish gap zone of 11452 – 11507 levels registered on September 4,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
A close above 11,507 is required to instill confidence among the bulls and but a reversal of the trend in favour of the bulls will be confirmed only on a close above 11,584, he said. A close below 11,300 shall resume the downtrend.
Intraday traders should remain neutral for the next session, Mohammad said. A strong rally towards 11,450 can be considered to create fresh positional shorts in the next session with a stop above 11,500 on a closing basis.
We have collated the views of experts on what investors should do on September 8:
Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas
The Nifty traded with a downward bias in the first half of the session. On the way down, it breached 11,300 but follow-through selling was lacking.
Towards the end of the session, the bulls rushed to defend the 11,300-mark on a closing basis. As a result, the index stays in the short term range of 11300-11585.
On the daily chart, the Nifty has formed a candle that resembles a Dragonfly Doji. Thus today's low of 11,251 now becomes crucial support for the short term.
On the higher side, 11,400-11,450 is an immediate hurdle zone to watch out for. If the Nifty crosses this barrier, then it can stretch towards the swing high of 11,585.Nagaraj Shetti, Technical Research Analyst, HDFC Securities
After showing weakness on September 4, the Nifty shifted to consolidation on Monday and showed minor upside recovery from the lows and closed the day on a minor positive note.
A small body of negative candle was formed with long lower shadow. This pattern indicates formation of a Doji candle. This market action could indicate an opportunity of minor upside bounce in the next session.
The near-term negative trend status remains intact for the market and any upside bounce from here up to 11,450-11,500 is going to be a sell on the rise opportunity. Immediate supports to be watched around 11,350-11,300 levels for the next few sessions.Ajit Mishra, VP-Research, Religare Broking Ltd
We feel the performance of global markets combined with the development on the India-China tensions along the Line of Actual Control will continue to dictate the market trend.
Traders should maintain positions on both sides and prefer hedged bets. It’s easier said than done due to volatile swings across the board and thus requires extra caution and active position management.
Sumeet Bagadia, Executive Director at Choice Broking
No specific movement in the market was seen as the Nifty settled at 11,355.05 level with the gain of 21.20 points. On the other hand, the Bank Nifty gave its close at 22,945 with a loss of 66 points.
Technically, the index has already given a breakout of its Rising Wedge formation and trading below its 21-Day Moving Average, which shows a southward movement in the index.
Downside support comes at 11,260. If the index breaks this support then 11,111 would be there, while upside resistance comes at 11,450-11,500.
Aamar Deo Singh, Head Advisory, Angel Broking Ltd
The markets bounced back from the lows of the day to end in the green. Overall, advance and declines were also evenly poised clearly indicating that markets appear to be getting into a consolidation mode.
Among the top 3 Nifty gainers were Bharti Infratel, HDFC Life & Dr Reddy, whereas the top 3 Nifty losers were M&M, UPL & Bajaj Finance.
We can witness increased volatility as India VIX continues to trade above the 20-mark, pointing to an increase in volatility in the coming weeks.
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