The Nifty closed higher for the third consecutive session on June 27, gaining 133 points, or 0.85 percent, at 15,832.
It formed a bearish candle, which resembled a Bearish Belt Hold pattern, on the daily chart as it failed to close above the opening level. The positive close was backed by an uptrend in global counterparts.
A 'Bearish Belt Hold' pattern is formed when the opening price becomes the highest point of the trading day (intraday high) and the index declines throughout the day making up the large body. The candle will either have a small or no upper shadow and a small lower shadow.
The index failed to hold on to the 15,900 mark, hence it could be a crucial hurdle in coming sessions followed by 15,984, the 20-day simple moving average (SMA) that can be a decisive level for a strong upside, while 15,700 will act as crucial support, experts said.
"…if the index slips below 15,800 levels in the next session then weakness may expand towards 15,600 levels," Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia said.
To regain some strength, the index should close above its 20-day SMA, the value of which is placed around 15,984, he said. In such a scenario, strength can expand towards 16,172, he said.
For the time, short-term traders should remain neutral on the long side. An intraday shorting can be considered if the Nifty slips below 15,800 for a modest target of 15,690, Mohammad said.
Volatility remained on the higher side. India VIX, which measures the expected volatility in the market, rose 2.21 percent to 21.01.
In the broader space, Nifty midcap 100 and smallcap 100 indices gained 1 percent and 3 percent.
With a positive close, the trading range suggested by options data shifted higher on the upper band, indicating that the index could trade in the 15,400-16,200 range in the coming sessions.
On the options front, the maximum Call open interest was seen at 16,000 strike followed by 16,500 strike, while the maximum Put open interest was seen at 15,500 strike followed by 15,000 strike. Call writing was seen at 16,200 strike followed by 16,300 strike, while Put writing was seen at 15,700 strike then 15,800 strike.
The Bank Nifty opened gap up by 500 points at 34,126 but failed to surpass 34,150 and witnessed profit booking. The pressure was intact at higher zones and the index closed 184 points higher at 33,811.
It, too, formed a bearish candle on the daily frame and has been forming higher highs from three sessions. Now, it has to hold above 33,750 to move towards 34,000 and 34,250, while supports are placed at 33,500 and 33,333, Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services, said.
On the stock front, a positive setup was seen in City Union Bank, Coforge, Dixon Technologies, LIC Housing Finance, ONGC, Bharat Electronics, L&T, Infosys, Asian Paints, Bharti Airtel, Federal Bank, Jubilant Foodworks, Coromandel International, ITC, AU Small Finance Bank, SBI and Cummins India. Weakness was seen in HDFC AMC, Biocon, Bandhan Bank and Havells, he added.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.