After registering a positive start, market benchmark Nifty50 ended in the red, forming a bearish candle and erasing all gains of the first half as investors booked profit in recent gainers.
Nifty ended the day at 17,245.65, down 70 points, or 0.40 percent after opening at 17,405.05 against the previous close of 17,315.50. Volatility index India VIX climbed 2.81 percent to 24.75.
The domestic equity market has been stuck in a range for the last couple of days amid increasing volatility.
Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in, observed albeit bulls made an attempt to get past the short term hurdle of 17,350, they failed to hold on to the gains above that as selling pressure resumed from the highs of 17,442.
"It appears that Nifty may remain in a consolidation range in the zone of 17,450 to 17,100 in the near term. Strength will resume on a close above 17,450 for higher targets present around 17,900 whereas weakness should be expected only on a close below 17,000. Positional traders with high risk-taking ability shall make use of the current weakness to create long positions but stop loss will continue to remain below 16,980," said Mohammad.
"While the overall trend is positive, we expect the market to consolidate in near term in the absence of any major news flow or developments," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.
Khemka pointed out that the market is facing headwinds from the Russia-Ukraine conflict, volatility in oil prices as well as an aggressive stance from the US central bank. Also, the second day of hike in domestic retail fuel prices added to overall cautious sentiments.
"Nifty needs to hold and close above 17,350 for an up move towards 17,500-17,750 levels. Strength in heavyweight sectors like metals, pharma and oil & gas are providing the much-needed support to the market," said Khemka.
Technically, the make-or-break level for Nifty is seen at its 200-day moving average at 17,021; expect a waterfall of selling below this mark, said Prashanth Tapse, Vice President (Research), Mehta Equities.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.