Nifty ended in the red for the second consecutive session on May 9 as the market continued witnessing a selloff amid concerns over rate hikes, inflation and geopolitical tensions.
Nifty opened at 16,227.70 against the previous close of 16,411.25 and touched intraday high and low of 16,403.70 and 16,142.10 respectively. The index finally closed 109 points, or 0.67 percent lower at 16,301.85.
Among the sectoral indices, media, PSU bank, metal and oil & gas indices fell over 2 percent each. Nifty Bank index fell 0.91 percent to 34,275.40.
There seems to be no respite for the markets from the bear hug as the weak Asian gauges and fall in European indices dampened the investors' sentiment.
After the results, shares of Reliance Industries came under severe hammering, which dragged the overall markets, Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, observed.
"On intraday charts, Nifty showed some recovery from the day's lowest level. We are of the view that the larger texture of the market is still negative but if the index sustains above 16,200, a pullback formation is likely to continue up to 16,450-16,550 levels. On the flip side, below 16,200, a fresh round of selling could be seen and below which, the index could touch the level of 16,140-16,100,” said Chouhan.
Palak Kothari, Research Associate, Choice Broking observed Nifty formed a Doji Kind of candlestick pattern on the daily chart which indicates indecision between buyer and seller.
"The index has taken a support at 78.60 percent Fibonacci retracement level of its previous up move which shows a northward movement towards its upside level of 61.8 percent Fibonacci retracement level. Moreover, Nifty has taken support from the lower band of Bollinger on an hourly chart which is a sign of short-term reversal in the counter," Kothari said.
"However, the momentum indicators 'stochastic' is trading with a positive crossover as well as divergence has been seen on an hourly chart which indicates bounce back momentum. The Nifty may find support around 16,000, while on the upside 16,600 may act as an immediate hurdle for the Nifty," said Kothari.
Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in pointed out that Nifty formed an indecisive formation that resembles a spinning top.
Mohammad believes there can be a slight hope of a recovery from the current levels as the index, at a low of 16,142, retraced around 80 percent of the last leg of the rally from the lows of 15,671 – 18,114.
"This pullback shall attempt to bridge the bearish gap present between 16,484 and 16,651 levels, registered on May 6. Meanwhile, if traders are sitting in short positions then they will be better off by covering them whereas some stability may offer an opportunity to play for a pullback move on the long side, said Mohammad.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies and not of MintGenie.