The Indian equity benchmarks rebounded sharply on Monday after opening in the red on the back of buying interest at lower levels. However, volatility remains elevated for benchmark Nifty as uncertain global and domestic cues may put pressure on the markets, according to analysts.
"On the daily chart, the index has formed a bullish candle with a noticeable lower wick, indicating buying interest emerging at lower levels. Despite today's pullback, Nifty continues to trade below its 20-day EMA. Moreover, the DI- remains above the DI+, suggesting that sellers continue to maintain an upper hand over the bulls," said Sudeep Shah Head of Technical and Derivatives Research at SBI Securities.
Immediate support for the index is placed in the 23,500-23,450 zone, and any sustainable move below this zone could result in Nifty extending its weakness towards 23,300, followed by 23,150 in the short term.
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On the flipside, the immediate resistance for Nifty is placed in the 23,850-23,900 zone, which coincides with the 20-day EMA.
"We are of the view that the intraday market texture is non-directional; hence, level-based trading would be the ideal strategy for day traders," said Shrikant Chouhan, Head of Equity Research at Kotak Securities.
Bank Nifty Outlook
The bank Nifty index also mirrored the benchmark's performance and staged a strong recovery after opening lower. Going ahead, analysts place the immediate support for Bank Nifty is placed in the 53,100-53,000 zone.
"Any sustainable move below this zone could result in Bank Nifty extending its weakness towards 52700, followed by 52400 in the short term," Shah highlighted.
On the upside, the immediate resistance for the Index is placed in the 53,900-54,000 zone.
Market Recap
Indian equity benchmarks ended little changed after seeing sharp swings during the trade as gains in Bharti Airtel Ltd. and Infosys Ltd. were offset by losses in SBI and Tata Steel Ltd. The NSE Nifty 50 ended 0.03% higher at 23,649.95, while the BSE Sensex closed up 77 points at 75,315.
Intraday, Nifty had risen as much as 0.2% to 23,595.65 and had fallen as much as 1.4% to 23,317. Meanwhile Sensex had risen as much as 0.3% to 75,466.60 and had fallen as much as 74,180.26.
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