The NSE Nifty witnessed a volatile session on Wednesday. The index opened on a positive note but couldn’t build upon the early gains. On the contrary, it faced selling pressure and tumbled sharply as the day progressed. On the downside, selling pressure was absorbed near the junction of 40-hour exponential moving average and the hourly lower Bollinger Band. Thereon the Nifty recovered to some extent. The overall structure shows that the index is taking a brief pause, which can continue for the next couple of sessions. Nevertheless, Sharekhan says that the overall outlook remains positive with a short-term target at 14600. On the downside, 14000-13950 will act as a near-term support zone

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Other technical observations of the daily chart, the Nifty is above the 20-day moving average (DMA) and the 40-DEMA, of 13761 and 13352, respectively. The momentum indicator is bullish on the daily chart. On the hourly chart, the Nifty is above the 20-hour moving average (HMA) and the 40-HEMA, i.e. 14137 and 14061, respectively. The hourly momentum indicator is bearish. Market breadth was negative with 869 advances and 1049 declines on the National Stock Exchange

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Ajit Mishra, VP - Research, Religare Broking says that Markets ended marginally lower in a volatile trading session, taking a breather after the recent surge. The benchmark opened marginally higher however profit-taking at the higher levels trimmed all the gains as the session progressed. Consequently, the Nifty ended in negative at 14146 levels, down by 0.4%. A mixed trend was witnessed on the sectoral front wherein metals, telecom and power were the top gainers while IT, FMCG and energy stocks traded subdued. The broader indices too traded mixed wherein Midcap ended higher by 0.3% while smallcap ended with losses of 0.1%.

Markets are continuously inching higher and making new highs despite overbought conditions. Religare Broking suggest booking some profits off the table and maintaining a stock-specific trading approach. Also, traders should limit naked leveraged trades and prefer hedged bets.