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The stock market experienced intense fluctuations on Tuesday, with the Sensex oscillating nearly 1,300 points. A sharp selloff in auto, IT, and FMCG stocks put an end to the Nifty and Sensex’s brief winning streak. Sensex fell 624.82 points, or 0.76%, to settle at 81,551.63, while the Nifty dropped 174.95 points, or 0.70%, closing at 24,826.20

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On 27 May, the stock market experienced intense fluctuations, with the Sensex oscillating nearly 1,300 points as investors grappled for dominance. A sharp selloff in auto, IT, and FMCG stocks put an end to the Nifty and Sensex’s brief winning streak. 

Despite the turbulence, the broader market showcased resilience, closing slightly higher after a volatile trading session, providing a hint of steadiness amid the uncertainty.

The Sensex declined 624.82 points, or 0.76% to settle at 81,551.63, while the Nifty dropped 174.95 points, or 0.70%, landing at 24,826.20. Market breadth was relatively balanced, with 1,893 stocks gaining, 1,898 losing ground, and 137 remaining unchanged.

The markets are demonstrating that pullbacks will be met with fresh buying, while elevated valuations will likely lead to profit-taking during rallies. A sustained upward trend is expected only when key indicators point to a revival in corporate earnings that is visible in portions across the sectors.

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Over the last few days, the markets have been unclear as the exact trends have not been able to sustain the large-scale volatility that is plaguing the market sentiment. Despite the constant attempt to bolster the trends the markets have been failing since the last one month. 

The trends seen currently is definitely not indicating the ability of the market to revive and this is causing the sentiment to remain muted. At the moment, we should be looking at the trends that is constantly showing an intention to revive from lower levels ahead of the monthly expiry.

Hence , one should track the trends that are in progress as upmove needs to continue their attempt to move above 25000 (Nifty Spot) to renew the bullish bias. Currently, the hourly charts are indicating that the prices are creating a new base and the shift in sentiment has formed a new support zone around 24500. 

Going ahead, the breach of this level could lead to resumption of selling pressure. As the trends emerging from lower levels remain hesitant, we can expect the rise to remain contained till we get a close above 25000.

Prices are stuck in a range but trying to inch higher. For undertaking shorts, we need to see Nifty move below 24500 and until then every dip will remain a buying opportunity. Based on the Open Interest data, 24800 is the immediate area of attention where the Max Pain of Nifty is now holding the market. 

If we witness a 30-minute range breakdown on Wednesday we can consider trends will remain tentative where we expect some decline to gather pace. As ranging market is in play, we need to be quick in profit taking as we are largely operating in a stock specific mode.

Raja Venkatraman is co-founder, NeoTrader. His Sebi-registered research analyst registration no. is INH000016223.

Investments in securities are subject to market risks. Read all the related documents carefully before investing. Registration granted by Sebi and certification from NISM in no way guarantees performance of the intermediary or provide any assurance of returns to investors.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.

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