Markets traded in a narrow band for volatility and eventually settled slightly higher. Initially, the benchmark opened on an uptrend, being led by its global counterparts, but pressure from IT majors and select heavyweights from other sectors limited the upside. Sector indices traded mixed while trading was cautiously defensive. Meanwhile, the broader indices, mid-cap and small-cap, outperformed and kept participants engaged to the end. The recent spate of negative news has prompted investors to reduce their exposure to equities. At one point the benchmark indices were doing great, but profit-taking again caused the markets to pare most of their early gains to end marginally higher. The Indian benchmark indices finally ended their losing streak and ended the day on a positive note with Nifty closing at 15842 and Sensex closing at 52973. Investor sentiment was boosted after data released by CMIE suggested around 8.8 million people entered the labor market in April. However, indices soon reversed and entered negative territory amid weak Asian market signals due to a 2.9% yoy decline in China's industrial production. There are concerns that raising interest rates to dampen higher inflation could hurt growth and lead to a further correction. The Nifty has been range bound from 15765-15950 and the chart structure suggests a strong possibility of continuation of range bound activity in the near term. For the bulls, 15950/53300 would be the immediate resistance level and above that we could see a sharp intraday pullback rally to 16000-16100. On the other hand, 15750 could be the immediate support level and below the same odds of hitting 15700-15600 it would be bright. As markets closely follow global cues, the US markets rebound raises hopes for some domestic recovery as well. However, we recommend participants to proceed with a cautious stance until we see signs of a reversal in the Nifty Index. Sectors now offer trading opportunities on both sides, so the focus should be more on stock selection and risk management. The Nifty opened on a positive note, trying to build on early gains. On the higher side, however, it stumbled near the 16000 mark. Thus, the index oscillated throughout the day, eventually forming a doji pattern on the daily chart. This shows indecisiveness in the minds of market participants. The index is expected to remain under pressure as long as it trades below 16,000. In this case, it can test the March low of 15671. On the other hand, if the bulls manage to clear 16,000 on a closing basis then the Nifty can make a bounce towards 16200-16250.
Resistance: 16000, 16200,
16500
Support: 15800,
15600, 15400
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