NEW DELHI: It was a dramatic move for the Nifty50, which hit the sub-10,300 level at one point of the day, only to close near the 10,500 mark on Tuesday .
The index made a smart rebound, as the bulls tried hard against the roaring bears. But that was still not enough, said experts.
One should avoid taking any kind of undue risks and remain light on positions, they said. In fact, it would be a prudent to stay light and avoid making any bottom fishing till definite signals emerge, said Sameet Chavan of Angel Broking.
Chandan Taparia of Motilal Oswal Securities said the index has been making lower lows for past seven sessions. "Weakness is visible the world over. Till it remains below 10,650, weakness could continue to take it towards 10,400 and 10,350," Taparia said.
The index has slipped below the 50-day moving average of 10,554. At close, the index stood at 10,498, down 168 points, or 1.58 per cent. Wednesday would see the outcome of two-day policy review of the RBI Monetary Policy Committee.
The price action suggests some sort of accumulation at lower levels. Filling the opening gap and defending the 100-day moving average appear to be key technical developments of Tuesday's session, said Mazhar Mohammad of Chartviewindia.in.
"If the bulls manage to defend today's low of 10,276 post RBI policy decision on a closing basis, there will higher chance of the market hitting a bottom around the prevailing level. If the 10,276 level is breached, the correction may get extended by another 250 points towards its 200-DMA at 10,028," Mohammad said.
"Going by the weekly chart, the near-term trend remains down, as long as the Nifty maintains its position below the 10,750-10,850 levels. Due to Tuesday's volatility, the trading range has widened drastically for the coming session. On the higher side, the 10,594 and 10,679 levels would be seen as intraday hurdles; whereas the immediate support zone is placed in the 10,423-10,347 range," Chavan said. </span>