Nifty ended in the green on April 20 after five consecutive sessions of losses, helped by gains in shares of recent underperformers such as HDFC twins, Infosys and TCS.
Nifty opened at 17,045.25 against the previous close of 16,958.65 and touched intraday high and low of 17,186.90 and 16,978.95 respectively. The index closed 178 points, or 1.05 percent, higher at 17,136.55.
Among the sectors, Nifty Auto jumped 2.20 percent, followed by oil & gas and IT indices that rose 1.94 percent and 1.16 percent respectively. FMCG and pharma indices rose by a percent each. Nifty Bank settled 0.07 percent lower.
Nifty reclaimed the 17,000 level but the index is still trading below its 200-day simple moving average (SMA) which is broadly negative.
Rupak De, Senior Technical Analyst at LKP Securities highlighted that the trend continues to be negative as the benchmark index Nifty remained below 17,400 even as Nifty has formed a bullish harami pattern on the daily chart, which suggests a possibility of a near-term recovery.
"On the higher end, Nifty may move towards 17,400-17,450 where once again it may find resistance. On the lower end support exists at 16,800," said De.
"On daily charts, Nifty has formed a small inside body bullish candle and on intraday charts. The index has been consistently taking support near 17,050. Direction-wise, the medium-term trend is still on the downside. But the continuation of the pullback rally is not ruled out if the Nifty succeeds to trade above 17,050," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
"For traders, 17,050 would act as a trend decider level, above which Nifty could rally up to 17,250-17,350. However, below 17,050, the uptrend would be vulnerable. Below the same, chances of hitting the level of 16,950-16,900 would turn bright,” said Chouhan.
As per Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One, 17,200 – 17,300 remains to be a stiff hurdle and only a sustainable move beyond this would result in strong momentum in heavyweights.
"On the flip side, 17,000 remains to be sacrosanct support. Considering the overall tentativeness, we advise traders not to trade aggressively and should continue with a stock-specific approach," said Chavan.
Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in, pointed out Nifty registered a Harami kind of bullish formation which signals a reversal in favour of bulls provided it is followed by a positive move in the next trading session.
"It remains critical for the Nifty to sustain above 16,978 and in that scenario, it can initially head towards 17,275. However, for a sustainable up move, the index needs to bridge the bearish gap present between 17,275 and 17,457 levels. In other words, Nifty needs to register a close above 17,457 for a sustainable up move," said Mohammad.
"Contrary to this, if the index breaches 16,978 on the downside, weakness may initially extend towards 16,824. Nevertheless, for the time being, it looks prudent to remain neutral on the index whereas intraday traders with a high risk-taking ability can short below 16,970 for a modest target of 16,870," Mohammad added.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint Genie.