The Nifty50 staged a smart rebound in Tuesdays trade to close a tad below the 10,550 mark and, in the process, formed a Strong Bullish candle on the daily chart. The bulls made a strong comeback in the second half of the session to help the index end the day 60 points higher.
Analysts said to maintain the bullish trend, the NSE barometer needs to sustain above the 10,333 mark. Before settling 0.58 per cent down at 10,549, the index witnessed strong volatility and hit an intraday high and low of 10,567 and 10,333, respectively.
Earlier in the morning, the index saw a gap-down opening after RBI Chairman Urjit Patel suddenly resigned post market hours on Monday.
“Nifty50 registered a Long White Day kind of formation, as the huge gap-down opening triggered buying by market participants, and it resulted in a long bullish candle and raised the intraday range to 234 points. Mondays bearish gap in the 10,558-10,599 zone remained unfilled. For initial signs of strength, the bulls need to bridge this gap first. In such a scenario, Nifty can test its 200-day moving average at 10,750,” said Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.
“Only on a close above 10,750 shall the momentum get strengthened in the near term. To retain the bullish bias, Nifty50 needs to sustain above 10,333 and a breach of this level shall set off the downswing with initial target at 10,191 level,” said Mohammad.
India VIX slipped sharply by 11.54 per cent to 18. “A sharp cut in VIX post the result day suggests the market could be headed for a consolidation, but it has to go down below 17-16 levels to again attract buying interest,” said Chandan Taparia, Derivatives and Technical Analyst at Motilal Oswal Financial Services.
Nagaraj Shetti, Technical Research Analyst, HDFC securities said the underlying short-term trend remains positive, and more upside is likely in the near term.
Near-term oscillators continued to be in the sell mode with momentum indicator Moving Average Convergence Divergence (MACD) showing a bearish crossover below the signal line. Arun Kumar, Market Strategist, Reliance Securities, said: “Given the overall weakness in the market, the index could face headwind in the 10570-10750 zone. Niftys immediate support is in the 10,250-10,333 range.”