The Nifty closed higher for the second day but it was a highly volatile session on March 29. The index formed a small-bodied bullish candle that resembled the Hanging Man pattern on the daily charts.
The index opened higher at 17,297 and after swinging between highs and lows, it settled at 17,325, up 103 points.
Along with positive global cues amid Ukraine-Russia peace talks, buying in select banking & financials, including the HDFC twins, IT and pharma stocks supported the market.
A Hanging Man is a bearish reversal candlestick usually formed at the end of an uptrend or at the top. In a perfect 'Hanging Man' pattern, there will be a small upper shadow or no upper shadow at all, a small body and a long lower shadow.
Experts expect some more volatility in the market as the monthly contracts expire on March 31. They said 17,450 would be a crucial hurdle and the index could head to 17,600-17,800 if it goes past it.
The volatility declined sharply to 21.30 levels, down 5.78 percent from 22.61, supporting the bulls. The bulls may get more support, if the India VIX drops decisively below the 20-mark in the coming sessions.
"Albeit, late recovery helped the index, it depicted an indecisive formation that resembles a Hanging Man. Moreover, the trading range for the day remained extremely narrow with 108 points," said Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia.
It would be critical for the index to sustain above 17,235 in the next session, as a breach could bring in intraday selling pressure.
If the bulls manage to push the index beyond 17,350, strength may extend to 17,450, he added.
A sustainable up move shall not be expected unless Nifty clears the hurdle of 17,450 on a closing basis, he feels.
As the market is heading for the monthly expiry, it may remain volatile for the next two trading sessions. It would be prudent to remain neutral on the index, Mohammad said.
The options data continues to indicate that the trading range for the Nifty will remain the same at 17,000-17,500.
Maximum Call open interest was witnessed at 18,000 strike followed by 17,500 strike, while maximum Put open interest was seen at 16,500 strike followed by 17,000 strike. Call writing was seen at 17,400 strike then 17,500 strike, while Put writing was seen at 17,300 strike then 17,200 strike.
Bank Nifty opened positive at 35,932 but remained under pressure in the first half. It, however, made a recovery in the second half and closed with gains of 137 points at 35,847.
The index formed a small-bodied bearish candle on the daily scale with a longer lower shadow.
"It has to hold above 35,750 levels for an up move towards 36,250 and 36,500 levels, whereas support can be seen at 35,500 and 35,250 levels," said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
On the stock front, there was a positive setup in Adani Ports, Indian Hotels Company, Eicher Motors, JSW Steel, ACC, Tata Chemicals, Divi’s Labs, Bharti Airtel, Jindal Steel & Power, UltraTech Cement, DLF, Cummins India, Alkem Laboratories, Bata India, Mphasis and Cipla, he said. Weakness was seen in Hero MotoCorp, ONGC, Aurobindo Pharma, PFC, United Spirits, BHEL and IOC.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.