Nifty ended in the red for the third consecutive session on May 25 amid mixed global cues as investors preferred to sell riskier equities ahead of the US FOMC minutes.
Nifty opened at 16,196.35 against the previous close of 16,125.15 and touched intraday high and low of 16,223.35 and 16,006.95 respectively.
The index finally closed 99 points, or 0.62 percent, lower at 16,025.80 with 18 stocks in the green and 32 in the red.
Nifty IT index emerged as the top loser among the sectoral indices, with a loss of 3.38 percent, followed by Nifty Realty and Nifty Media as they fell 2.88 percent and 2.86 percent respectively.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities pointed out that Nifty, on intraday charts, has been holding a lower top formation for the last three days. On the daily charts, it has formed a bearish candle which is broadly negative.
"We are of the view that the short-term market structure is weak but it is in oversold territory. For traders, now 16,000 would act as a sacrosanct level. If the index succeeds to trade above the same, then it could move up to 16,150-16,260. However, below 16,000 the selling pressure is likely to increase. Below the same, the chances of hitting 15,900-15,850 would turn bright,” said Chouhan.
Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in believes if bulls fail to make a comeback in the next trading session then the Nifty may eventually test the recent lows present around 15,775. Any strength in the near term may take the indices towards the upper end of the trading range present at around 16,400.
More weakness should be expected in the index if it closes below 16,000. For the time being, traders should adopt a wait and watch approach, said Mohammad.
As per Om Mehra, a research associate at Choice Broking, Nifty has formed three black crow patterns in the daily chart, suggesting bearishness would remain intact.
"We expect a rise in volatility as well on monthly expiry day. Riding against the trend may not be beneficial for short term traders. All major moving averages are above 16,300. Indicators such as MACD and RSI are still struggling to overcome the oversold zone in the daily timeframe. Nifty has support at 15,800 while on the upside, 16300 may act as immediate resistance for monthly expiry," said Mehra.
Disclaimer: The views and recommendations made above are those of individual analysts and not of MintGenie.