Markets snap five days of losses to close in the green. Here’s how the Nifty is likely to trade tomorrow

• Follow

Indian markets came back in the green after five days of losses.

The S&P BSE Sensex opened with 0.5% gains to also rise above the 50,000 mark in early trade. However, it could not hold above the milestone towards the close of a highly volatile session.

Both the benchmark indices S&P BSE Sensex and the Nifty50 although managed to shut shop with marginal gains of only 7 points at 49,751 and 32 points to settle at 14,708, respectively.

Also, broader markets continued their upward streak and outperformed the benchmarks.

Metal stocks outshone for second straight session riding on surge in copper prices in international markets with the index up up 3.71% in today’s session.

RIL, L&T, ICICI Bank, TCS, SBI contributed maximum to the recovery in markets today.

Here’s how experts believe the markets are likely to trade tomorrow

Shrikant Chouhan, EVP, Equity Technical Research, Kotak Securities: 

Markets logged small gains after a sharp decline in last five sessions.

Most of the time such type of formation works as a continuation and on Wednesday, if the market breaks the 14,630/49,600 level, the Nifty / Sensex could fall further on the support of 14,530/49,300 levels.

However, a 50% retracement shown by the Nifty / Sensex after the announcement of the Union Budget could be a reversal for the market.

In short, there should be a buying strategy if the Nifty / Sensex falls to the 14530/14500 levels, however, if the Nifty closes below the 14500 level, it would indicate further weakness.

On the upside, 14,850/50,350 and 14,950/50,750 levels would be the major obstacles. While the metals sector performed well to date, bank stocks failed to perform due to exceptional strength in long-term bond yields.

Manish Shah, Founder, Niftytriggers.com

Uncertainty of low volatility candle suggests a range bound action within 14,900-14,650 over the next two days. Uncertainty creeps in as Nifty showed an inside day pattern which is also the narrowest day of the last 8-10 days. This pattern appears after a long red candle.

The location of the pattern is at the support of 20 periods moving average, .382 per cent retracement of 13,596-15,430 rally and at the support at the previous swing high. The bulls tried to push the index higher but there was not much headway. A narrow ranged candle at the support has to found eager buyers are yet. The gap open was not able to sustain.

The decline from the high at 15,430 till yesterday’s low is around 5.3% for the Nifty and the previous corrective decline since the start of the rally have averaged around 3-8%. As such we are not seeing any price overbalance. The decline is classified as a corrective decline in the ongoing bull trend at least till the evidence available on the last trading day.

The better news for the bulls is that the decline in European markets did not result in a bout of selling in Nifty as stocks in the metals and realty sector soared. Pharma and Banks remained laggards. Nifty has to hold above the support at 14,650-14,600.

If this gives away there could be a drop further down to 14,450-14,400. The safest place for the bulls to assert supremacy would be above 14950 on a strong momentum candle. Gut feeling points toward a lacklustre trading range between 14900-14650 over the next two-three days. February expiry could be a low volatility affair.