For time being it looks prudent to avoid buying the dip, Mazhar Mohammad advised.
The Nifty50 after opening lower remained highly volatile with a negative bias throughout the session and closed a tad below the psychological 9,000 mark. Weak global cues and announcement of an extended lockdown in some states till the end of April dented trader sentiment.
The index fell after nearly 13 percent rally seen last week and formed a small bodied bearish candle on daily charts as closing was lower than opening levels.
Overall, the Nifty50 seemed to be in consolidation mode as it traded in a range of 9,128–8,904 levels witnessed in last Thursday's trading session. Experts expect the consolidation to continue in the coming session too with 8,900 acting as crucial support.
The Nifty50 started off the day with a negative bias at 9,103.95 and hit a day's low at 8,912.40 in morning trade itself. It managed to recoup losses in late morning deals but immediately drifted lower due to selling pressure. The index closed at 8,993.85, down 118.05 points or 1.30 percent.
The market will remain shut on April 14 for Dr Baba Saheb Ambedkar Jayanti.
"In the near term, instant support appears to be placed around 8,900 levels whereas critical support on short term charts is placed at 8,770 levels in the form of 13-day exponential moving average. If the index breaches that level, then it will confirm near term weakness with initial targets of 8,500 levels," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
However, strength in the index shall resume on a close above 9,131 levels, he said, adding in that scenario he expects this rally to extend towards the zone of 9,700 – 9,900 kind of levels.
Nevertheless, considering prevailing uncertainty in the financial markets, Mazhar Mohammad advised traders to buy only the strength above 9,132 levels and look for bigger targets with a stop below 8,900 levels. "For time being it looks prudent to avoid buying the dip."
Ajit Mishra, VP - Research at Religare Broking feels the volatility will remain high in the coming sessions too and traders have no option but to align their positions accordingly.
The Bank Nifty also depicted same type of chart as it opened lower at 19,854.90 and hit an intraday low of 19,294. The index also attempted a recovery in late morning deals but failed to hold on to same as it immediately slipped into red.
The index closed at 19,488, down 425.60 points or 2.14 percent and formed small bodied red candle on daily charts.
"Since the past few sessions, index has been sideways and consolidating. A strong breakout is expected shortly which is likely to trigger sharper moves. We continue with our bullish view for the Bank Nifty for target zone of 21,450-22,000," Amit Shah, Technical Research Analyst with Indiabulls Securities said.Traders should look to go long on a positional basis above 20,000, he advised. "Support for Bank Nifty is seen at 18,500-17,700."