The benchmark equity indices ended Wednesday’s trading session in positive territory. The NSE Nifty 50 gained 215.15 points or 1.01% to settle at 21,453.95 points. While S&P BSE Sensex closed 689.76 points higher or 0.98% to settle at 71,060.31 points. The sectoral indice Nifty Bank gained 67.35 points or 0.15% to settle at 45,082.40 points.
On the sectoral front, Media and Metal stocks end higher among their peers. The broader indices ended in the green, with midcap stocks gaining the most.
The laggards include ICICI Bank, Axis Bank, Asian Paints, Adani Ports, and HDFC Life. The Indian Volatility Index (India VIX) closed 3.23% lower.
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“Markets took a breather after Tuesday’s slide and gained nearly a percent amid volatility. The tone was negative at the beginning however rebound in the select heavyweights not only capped the decline but also helped the Nifty to close in the green. Meanwhile, a mixed trend continued on the sectoral front wherein metal, energy, and IT performed well while banking and realty ended subdued. The broader indices also witnessed some recovery and managed to gain over one and a half percent each,” said Ajit Mishra, senior vice president of technical research at Religare Broking.
The banking index tested its long-term moving average (200 EMA) on Wednesday so we can’t rule out some consolidation. However, it would be tough for other key sectors to trigger any meaningful recovery in Nifty. We thus feel traders should continue with a stock-specific trading approach and maintain positions on both sides, said Mishra.
“Going ahead we expect Nifty to face resistance in zone 21500 – 21520 where the key hourly moving averages are placed. Traders should look for signs of weakness around the resistance zone before initiating shorts as there is a possibility of a deeper retracement till 21780 – 21800 where the hourly upper Bollinger band is placed. The hourly momentum indicator has triggered a positive crossover which is a buy signal. Thus, price and momentum indicators are providing divergent signals which can lead to high intraday volatility. On the downside 21250 – 21220 shall act as a crucial support zone from short-term perspective while 21500 – 21520 is the immediate hurdle zone from short-term perspective,” said Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas.
“Bank Nifty also opened gap down and thereafter consolidated for the day closing marginally in the green. We expect the consolidation to continue going ahead in the range 44500 – 45750. Minor degree pullback towards 45460 – 45810 should be used as a selling opportunity. On the downside we expect the Bank Nifty to drift towards 44500 – 44400 from short-term perspective,” Gedia said.