The Nifty recouped the day's losses in the last hour of trade to close flat with a positive bias on May 3, supported by FMCG, metals, and select IT, pharma and auto stocks but banks were under pressure.
The Nifty opened sharply lower at 14,481.05 and hit the day's low of 14,416.25. It recouped losses in the last hour to hit the day's high of 14,673.85 before signing off 3.1 points higher at 14,634.20.
It formed a bullish candle on the daily charts as the closing was higher than the opening level. Experts say sideways trading is likely in coming sessions with a pullback towards 14,920.
India VIX moved up by 2.88 percent from 23.02 to 23.69 levels.
Traders should remain neutral on the index by shifting focus to stock- specific opportunities, Mazhar Mohammad, Chief Strategist -Technical Research & Trading Advisory at Chartviewindia told Moneycontrol.
As long as Nifty sustains above 14, 470, one can look for sideways consolidation with a positive bias, Mohammad he said. Moreover, "at an intraday low of 14,416 levels, the Nifty retraced 62 percent of last leg of the rally from the lows of 14,151 to 15,044 . Hence, today's sharp bounce, can also be an indication of temporary bottom at 14,416. In that scenario a sideways trading range can be witnessed in the next couple of trading sessions with pull back targets remaining in the zone of 14,800 – 14,920 levels", he said.
Contrary to this, weakness can be expected to resume on close below 14,470, he added.
Option data indicated that the Nifty could see a wider trading range of 14,200 to 15,200 levels. Maximum Put open interest was seen at 14,000 followed by 13,500 strike, while maximum Call open interest was seen at 15,000 followed by 15,500 strike.
The Bank Nifty opened gap down at 32,368.55 and moved in a consolidative manner throughout the day. Banking stocks underperformed the broader market and the index broke its immediate support of 32,000. It settled the day with losses of 316 points at 32,465.80 and continued forming lower highs-lower lows from the last two sessions.
"The Bank Nifty formed a Bullish Hammer kind of candle on the daily scale, which indicates that now buying interest is seen at lower levels after the correction of last three sessions. Now it has to hold above 32,250 to witness an upmove towards 33,000 and 33,333, while on the downside, support is seen at 32,150 and 32,000 levels," Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
On the stock front, bullish setup was seen in BHEL, Adani Enterprises, Marico, SAIL, ICICI Prudential Life, Bharti Airtel, Tata Steel, NMDC, Apollo Tyres, Maruti Suzuki, Asian Paints, Bajaj Finance, SRF, SBI Life, Cadila Healthcare, Tata Consumer Products, Hindalco, Grasim and Divis Labs. Weakness was seen in Titan, Shriram Transport Finance, Reliance Industries, RBL Bank and BPCL, he added.
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