The Nifty50 reversed some of the previous day's gains and closed with nearly a percent loss amid volatility, as every sector participated in the correction on April 27, ahead of the expiry session for April futures and options contracts. Weak Asian cues after rout on Wall Street overnight, intensified energy crisis, growth worries due to the COVID situation in China, and the Ukraine war put pressure on the market.
The index formed a small-bodied bearish candle which resembles a Hammer kind of pattern formation on the daily charts, as the index recovered smartly from the day's low. As the index smartly defended 16,900-17,000 levels which could be crucial support levels in the near term, the volatile trade is likely to continue till there are some positive cues on the Ukraine war, experts say.
The Hammer is a bullish reversal pattern formed after a decline. It consists of no upper shadow, a small body, and a long lower shadow. The long lower shadow signifies that the stock bounced back after testing its support, where demand is located.
The volatility, which was cooled down significantly in the previous session, spiked over 20 levels again, which is a supportive factor for bears. Hence the same needs to get back to around 17-18 levels for some kind of stability in the market. India VIX increased by 7.38 percent to 20.61 levels.