Minor upside bounce indicated

The market closed on a mixed note on Tuesday after falling sharply in previous two straight sessions due to tax proposals in Budget.

The BSE Sensex rose 10.25 points to 38,730.82 while the Nifty50 fell 2.70 points to 11,555.90.

The broader markets outperformed with the Nifty Mid-Cap and Small-Cap indices rising 0.4 per cent each.

Bajaj Finance, Sun Pharma, IOC, Bajaj Finserv and Hero Motocorp were top gainers among Nifty50 stocks, rising 3-6 percent.

Titan Company plunged 12 per cent. UPL, GAIL, TCS and Yes Bank fell 2-3 per cent.

This week, the Index continued the correction phase of the last week and tested the levels near the lower side of the rising channel on the daily chart below the 50-day moving average. On Tuesday, Nifty50 in the morning session tested the support of at the lower side of the rising channel on the daily chart and bounced from the day's low. For Wednesday, the market looks bearish on the daily chart and expected to follow the global trend and may trade in the range of 11,450 to 11,600. Pharma sector may show some positive movements and the IT sector is expected to slide down, Romesh Tiwari, Head of Research, CapitalAim said.

The Indian equity indices halted its downward trend on Tuesday despite muted global cues. After a weak start, the Nifty Index inched upwards in the latter half and finally closed on a flat note at 11,556 (down 3 points). Amongst the broader market indices, 'BSE Mid-Cap' outperformed the benchmark and ended higher by 0.6 per cent, while 'BSE Small-Cap' ended marginally positive. Amongst the sectoral indices heavy selling was witnessed in consumer durables (down 6.8 per cent) as Titan plunged 12.4 per cent on account of muted Q1FY20 commentary. On the other hand, Realty, Oil & Gas and Capital Goods recovered and gained in the range of 1.1-2.8 per cent.

Technical View

"After showing a sharp weakness in the last couple of sessions, the Nifty seems to have halted its downside momentum today and closed the day on a flat note amidst a volatility. A small positive candle was formed today with long lower shadow. Technically, this pattern indicates a high wave type candlestick pattern. Normally, a formation of such high wave type candle patterns after a reasonable weakness could be viewed for a minor upside bounce," said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

"The short term trend of the Nifty is in the process of showing upside bounce from the lows. Important supports to be watched around 11,450-425 levels and crucial overhead resistance is placed around 11,625 levels," he further said.

Market View

"We continue to maintain our cautious stance on the Indian markets as the focus will now shift to Q1FY20 earnings. The market seems to be building in a weak quarterly performance and hence stock specific volatility is likely to remain high. On the global front, on-going geo-political issues between US and Iran, crude oil prices and currency movement will induce volatility in the markets," Ajit Mishra Vice President, Research, Religare Broking Ltd.