The Nifty50 gained some strength in the last one-and-half-hour of trade after a weak opening amid volatility and ended flat with a positive bias on December 15.
The index opened lower at 13,547.20 and hit an intraday low of 13,447.05 but gained strength in the last hours to hit the day's high of 13,589.65 before signing off the session with 9.7 points gains at 13,567.90.
It formed a small-bodied bullish candle that resembled an indecisive formation on the daily charts, as closing was near opening levels and long lower shadow candle indicated that declines are being bought.
Experts say 13,400 remains a key level for correction but if the index decisively crosses the 13,600-mark, there could be a sharp upside.
India VIX was down 0.28 percent from 19.40 to 19.34, which remained supportive of the bulls.
Traders should remain neutral and refrain from shorting unless the Nifty closes below 13,400, Mazhar Mohammad, Chief Strategist–Technical Research & Trading Advisory at Chartviewindia.in told Moneycontrol.
"For the time, the bulls appear to have 'conditioned' to buy a dip as the Nifty50 smartly recoiled from the intraday lows of 13,447 levels before signing off the session with yet another indecisive formation for 4th day in a row. Nevertheless, yet times this kind of indecisive formations especially at the top end of rallies may prove to be distribution phases, which unfortunately will be known only after a breakdown," Mohammad said.
Despite intraday recoveries, advance decline ratio was tilted in the favour of the bears and the weakness will be confirmed on a close below 13,400, he said.
If the Nifty manages a close above 13,600 then the rally will initially expand towards 13,700 but a fresh spurt towards upside will happen only on a close above the 15-day old ascending channel, he said.
The options data indicated that the Nifty could remain in an immediate trading range of 13,300-13,750.
On this options front, maximum Put open interest was seen at 13,000 followed by 13,200 strike while maximum Call open interest was at 13,000 followed by 13,500 strike. Marginal Call writing was seen at 13,900 then 13,700 strike while Put writing was seen at 13,000 then 13,300 strike.
The Bank Nifty failed to surpass the immediate hurdle of 30,800 and drifted lower to hit the day's low of 30,345.75. It made some recovery but formed a bearish candle on the daily charts and closed the session down 54.90 points at 30,691.
"The index has been moving in between 30,200 and 30,850 levels for the last five trading sessions and requires a decisive range breakout to commence the next leg of movement. Now it has to continue to hold above 30,500 to witness an upmove towards 31,000 then 31,200, while on the downside, supports are seen at 30,300 then 30,200 levels," Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
Positive setup was witnessed in Bajaj Finance, L&T Finance Holdings, Havells, Jindal Steel & Power, Bharat Forge, M&M Financial, JSW Steel, LIC Housing Finance, Voltas and HDFC, while weakness was seen in InterGlobe Aviation, Glenmark, ICICI Prudential, Aurobindo Pharma and Axis Bank, he added.