The Nifty had a good start on positive Asian cues but wiped out all the gains amid volatility in the last couple of hours of trade to end 24.50 points, or 0.15 percent, lower at 15,810.90 on July 5.
The index formed a bearish candle on the daily charts as the closing was lower than the opening level.
"This selling is coming from the massive supply zone present between 15,900 and 16,172 levels. Hence, if the index slips below 15,661 levels, then it may signal the end of the pullback rally, which is in place from the lows of 15,183 levels," Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia said.
In that scenario, the initial target can be 15,511 and below it, the index can test the June lows present at around 15,183.
If the index manages to defend 15,785, then the bulls can make another attempt at bridging the bearish gap with a close above 16,172 levels, the market expert added.
Considering the intraday reversal, traders should avoid long side bets but intraday shorting can be considered below 15,785 for a modest target of 15,670.
The breadth, which was quite supportive in the morning session, turned mixed towards the end of the day, pushing the broader markets lower. The Nifty midcap 100 and smallcap 100 indices ended 0.27 percent and 0.07 percent lower.
The market is expected to remain uncertain and rangebound till the volatility stays above the crucial 20 mark, experts said. India VIX, which measures the expected volatility in the market over the next 30 days, fell 0.88 percent to 20.79 levels.
"Looking at recent price action that construes an unclear market trend, participants are advised to avoid any undue risk and stay abreast of global developments. Also, as much action is seen outside the index, we advocate continuing with a stock-centric approach for better trading opportunities," Osho Krishan, Senior Analyst, Technical & Derivative Research, Angel One, said.
On the options front, the maximum Call open interest was at 16,000 strike followed by 16,200 and 16,300 strikes, with Call writing at 15,900 strike then 16,000 strike.
The maximum Put open interest was seen at 15,500 strike followed by 15,700 and 15,000 strikes, with Put writing at 15,800 strike, then 15,900 and 16,000 strikes.
The above data indicates that the Nifty could see a trading range of 15,500 to 16,300 in the coming sessions.
The Bank Nifty, too, formed a bearish candlestick on the daily chart as the closing was below the opening level. The banking index opened above the 34,000 mark and rallied more than 400 points to hit the day's high of 34,361 but selling in the later part dragged the index down to 33,757.
The index closed 125 points lower at 33,816. As per pivot charts, the crucial supports are placed at 33,600 followed by 33,370 levels, whereas 34,200 could be initial resistance followed by 34,600, experts said.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.