The Nifty50 failed to hold on 15,000 but managed to close higher for the fourth successive day amid volatility on April 29, the monthly expiry day for derivative contracts. The market was supported by the Federal Reserve's decision to keep rates at zero with continuing bond-buying programme but the rising COVID-19 cases capped upside.
The index formed a bearish candle on the daily charts as the closing was lower than opening levels. Experts say 15,000 is crucial for strong upside.
Traders should remain neutral on the long side in the next session, whereas intraday traders should look for shorting below 14,810 levels for a modest target towards 14,700 levels, Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia told Moneycontrol.
The Nifty opened higher at 14,979 and hit an intraday high of 15,044.35 but after an initial hour, erased gains to hit a day's low of 14,814.45. The index recouped losses and remained volatile for the rest of the session. It rose 30.40 points to close at 14,894.90.
"Bulls disappointed as they failed to capitalise on the strong opening. Moreover, by the end of the day, advance-decline ratio skewed in favour of bears, hinting broad-based profit-booking around psychologically critical resistance of 15,000 levels," Mohammad said.
In the next trading session, if the index fails to sustain above 14,815, then it can see some selling pressure with initial targets placed near 14,700 levels, he said.
However, the sentiment shall remain positive as long as the Nifty sustains above April 21's bullish gap area present in the zone of 14,694–14,667, whereas a close below 14,667 may once again tilt the tide in the favour of bears, he added.
But if the index closes above 15,000, then that will confirm strength for the bulls and an initial target towards 15,350 can be expected.
India VIX, which measures the volatility in the market, remained above the key 20-mark, rising by 3.21 percent from 22.58 to 23.30 levels.
Since it is the beginning of new series, the options data is scattered at different strikes. Maximum Put open interest witnessed at 14,000 followed by 13,500 strike, while maximum Call open interest was seen at 15,000 followed by 15,500 strike. The data indicates a wider trading range for the Nifty50 at 14,500-15,500.
The Bank Nifty opened gap up at 33,901.60 but failed to hold above 34,250 and moved in a range throughout the day. It concluded the day flat with minor losses of 8.3 points at 33,714.50. It formed a bearish candle on the daily scale and continued forming higher highs from the last seven sessions.
"Now the index has to continue to hold above 33,500 for an upmove towards 34,000 and 34,250, while on the downside, support can be seen at 33,333 and 33,000 levels," said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
On the stock front, bullish setup was seen in JSW Steel, SAIL, Tata Steel, Bajaj Finserv, NALCO, NMDC, Vedanta, Bajaj Finance, Sun TV Network, Ramco Cement, Apollo Hospitals, Axis Bank, Dr Lal PathLabs, UPL and Cholamandalam Investment. Weakness was seen in Hero MotoCorp, Indiabulls Housing Finance, Canara Bank, L&T Finance Holdings, Ashok Leyland, BHEL, PNB, M&M Financial and Escorts, he added.