Technically, after a sharp fall, the index opened in the green but corrected sharply. After an early morning selloff, the index witnessed range-bound activity. Global markets remained on edge and were mixed Tuesday as investors braced for a heightened risk of global recession, even as dip buyers emerged. Chinese markets recovered on expectations of more stimulus measures by the government. People’s Bank of China injected about $24.7 billion of liquidity into the sector via repo market operations. Nifty took support from the upgap of 16947 and closed flat after making a lower low compared to the previous day. The Sensex fell 38 points at 57108, while Nifty 50 ended 9 points down at 17007.
Lower top formation intraday charts and a bearish candle on daily charts indicate a continuation of weakness in the near term. However, momentum indicators suggest a strong possibility of a pullback rally from the current levels. We are of the view that the bearish sentiment in the market is still intact and a fresh pullback rally is possible if the index succeeds to trade above the 200-day SMA (Simple Moving average) or 16950/56900. Above which, the index could retest the level of 17100-17150/15400-57600. On the flip side, below 16950/56900, it could slip till 17800-17700/15500-56200. The intraday texture of the market is non-directional, hence level based trading would be the ideal strategy for the day traders.
Resistance: 17400,
17550, 17700
Support: 17300,
17150, 17000
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