Nifty suffered losses of about a percent on April 7, extending its losing run into the third consecutive session as investors sold stocks across sectors ahead of the RBI MPC outcome tomorrow.
The benchmark index opened at 17,723.30 against the previous close of 17,807.65 and touched intraday high and low of 17,787.50 and 17,623.70 respectively. The index finally closed 168 points, or 0.94 percent, lower at 17,639.55.
Among the sectoral indices, metal (down 1.66 percent), media (down 1.27 percent) and IT (down 1.25 percent) emerged as the top losers. Nifty Bank index closed 0.20 percent lower.
Analysts now expect the markets to remain volatile on April 8, reacting to MPC meet outcome. MPC is widely expected to maintain the status quo on rates, however, investors will closely watch the commentary on inflation and growth.
Technical charts are showing signs of negativity but a short rally is also expected as the index is near important support.
"Technically, on intraday charts, the Nifty is still holding lower high series formation and has also formed a bearish candle which is largely negative. However, in the last three days, the index has corrected over 475 points and after a short-term correction, it is currently trading near the important retracement support level," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
"The market has completed one leg of correction and there is a strong possibility of a quick intraday relief rally if the index trades above 17720. Above the same, the index could move up to 17800 -17850," said Chouhan.
The Market was unable to sustain above an important level of 17,800, and Vijay Dhanotiya, Lead of Technical Research at CapitalVia Global Research expects the market correction to continue till the support level of 17600.
"Market is aligned to be in a range-bound movement between the levels of 17600-18000. Bounce from the support levels of 17600 can be expected which could lead to improvement in market breadth and a rally till the levels of 18400," said Dhanotiya.
Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in believes if the Nifty slips below 17,600 in the next trading session, then the weakness may extend to 17,400 where some support can be expected.
"As the market has been in a downward spiral for the last three consecutive sessions, some stability should be found around 17,600. On such stability, a sideways consolidation can be expected. For time being, it looks prudent to wait for some signs of strength before going long," said Mohammad.
Rupak De, Senior Technical Analyst at LKP Securities observed Nifty has fallen from the rising channel on the daily chart which suggests a waning bullishness.
"The daily RSI is in a bearish crossover. The trend looks negative for the near term. On the lower end, support is visible at 17450 whereas resistance is seen at 17750-17800," said De.
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