Markets take a breather, but Nifty closing above 50-day SMA points at bullish sentiment

Markets recovered from day’s low and ended down 0.7 percent, dragged dragged by metal and financial stocks. Mohit Nigam, Head, PMS Hem Securities said the Nifty managed to hold important support levels of 14,800. Public company stocks showed some buying interest in the market with the Nifty PSE index up by 3.11 percent and Nifty PSU up by 1.12 percent.

Coal India, NTPC and IOC were among the top gainers in Nifty 50 while JSW Steel, Hindalco and Kotak Mahindra Bank were among the top losers in Nifty 50 today. 14,500-15,000 is the range which needs to break for fresh wider movement.

Sumeet Bagadia, Executive Director, Choice Broking, said, technically, the Nifty index traded below the falling trendline as well as the upper band of Bollinger formation on the daily chart, which acts as an immediate resistance for the counter. However, the Nifty has given closing above 50 DMA and Ichimoku Cloud formation, which points out bullish strength in the index. At present, the Nifty index is holding support at 14,700 levels while an upside resistance seems at 15,000 levels, he said.

Technically, on intraday charts the market has formed lower top kind of formation, but at the same time the Nifty took the support near 50-day SMA which is broadly positive for the market, said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities. "We are of the view that post-strong uptrend rally, bulls may prefer to take a temporary pause near 14,950/ 49,500 and because of weak global market conditions market are likely to consolidate between 14,750 to 14,900/ 48,500-49,300 price range. For the day traders, 14,900/49,300 would be the key level to watch out. Above the same we can expect continuation of uptrend wave up to 14,965-15,000/ 49,800-50,000. On the flip side, trading below 14,800/ 48,990 could trigger one more leg of correction till 14,750/ 48,500," Chouhan added.