Nifty50 snapped its four-day winning streak on April 30, the first day of the May series following weak Asian cues. Rising COVID-19 cases and uncertainties surrounding vaccination also weighed on the sentiment.
The index formed a bearish candle on the daily charts as closing was lower than opening levels. During the week, it gained 2 percent and formed a bullish candle on the weekly scale. Experts feel the index needs to hold 14,600 levels to rebound in the coming sessions.
Mazhar Mohammad of Chartviewindia advised positional traders with a high-risk appetite to make use of rallies to create short positions and look for an initial target of 14,450 levels whereas a close above 14,900 can be considered as an initial sign of strength.
Nifty50 started off the session in the red at 14,747.35 and gradually moved lower to hit a day's low of 14,674.45. Consequently, the index plunged 263.80 points or 1.77 percent to close at 14,631.10.
"Last Thursday's strong up move, on expiry session, is looking like a bull trap as markets failed to witness follow-through buying. Moreover, with today's fall, the market erased preceding two trading sessions gains and closed below bullish gap area present between 14,694 – 14,667 levels, which should offer some buying support," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia told Moneycontrol.
As Nifty closed below this gap it seems to have reinstated bearish sentiment in the near term. Hence, in next trading session if Nifty fails to sustain above 14,600 levels, initially it may head towards 14,450 levels where 100-day simple moving average is placed and which has interestingly offered support on closing basis, he said.
In case Nifty fails to hold on to the said support, it should head all the way down to retest the recent low of 14,151 levels. For the time being last Thursday's high of 15,045 levels can remain as a near term top, he added.
India VIX fell by 1.17 percent from 23.30 to 23.02 levels. On the options front, 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. Options data indicated that Nifty50 could see a wider trading range of 14,000 to 15,200 levels in coming sessions.
Bank Nifty opened gap-down at 33,112.40 and moved in the southwards direction throughout the day to hit a day's low of 32,784.80. Banking stocks faced sustained pressure during the day and the index settled the day with huge losses of 932.70 points or 2.77 percent at 32,781.80.
It formed a bearish candle on the daily scale, but a bullish candle along with a long upper shadow on the weekly frame. "Bank Nifty negated its formation of higher highs of the last seven sessions. Now, till it holds below 33,333, weakness could take it to 32,500 and 32,150. While resistance can be seen at 33,333 and 33,500 levels," said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
On the stocks' front, bullish setup was seen in SAIL, Sun TV Network, Container Corporation, Grasim, Divis Labs, Tata Chemicals, Apollo Tyres, Federal Bank, Glenmark, United Breweries, Sun Pharma, Dr Reddy's Labs and Aurobindo Pharma while weakness was seen in HDFC, PVR, Kotak Mahindra Bank, AU Small Finance Bank, RBL Bank, M&M, Tata Motors, TCS, Havells, Maruti and L&T, he added.