Even as the Indian equity markets broke out of their three-day losing streak and ended higher on Thursday, analysts advise traders to tread with caution as volatility is likely to continue given the global uncertainty.
"Nifty formed a second consecutive high-wave candlestick pattern featuring a small real body and long upper/lower shadows. This reflects continuation of the intraday volatility as the index closed around the 200 days EMA," said Bajaj Broking Research.
Key resistance for the index lies between 25,500 and 25,600 levels, while on the downside support will be found at around the 25,150 level, it added.
"Technically, the market has formed a back-to-back indecisive pattern, and that may keep the market volatile within the broader trading range of 25,500 and 25,000," highlighted Shrikant Chouhan, head of equity research at Kotak Securities.
Chouhan advised traders to be careful while trading at resistance and support levels, and reduce their week-long positions between 25,500 and 25,600.
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Nifty Bank
Analysts expect Bank Nifty to consolidate amid a stock specific action. "The Bank Nifty formed a doji candlestick pattern with long shadows in either direction signaling consolidation amid stock specific action," said Bajaj Broking Research.
On the upside, immediate resistance is at 60,000 levels while 58,700–59,000 zone will continue to act as key support.
Market Recap
The benchmark indices ended a volatile session in the green, snapping their three-day losing streak. Nifty had risen above the 25,400 levels but closed near 25,300. Intraday, both Nifty and Sensex rose nearly 1%. Nifty ended 0.53% higher at 25,289.9, whereas the Sensex ended 0.49% higher at 82,307.37.
Broader indices, on the other hand, ended in the negative. Nifty Midcap 150 ended 2.49% lower and Nifty Smallcap 250 closed 2.68% lower. Most sectoral indices rose with Nifty Defence and Nifty Media leading the advance, and Nifty Realty was the only sector in red. The market breadth was skewed in the favour of buyers, as 1,268 stocks declined, 2,962 advanced and 162 remained unchanged on the BSE.
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