**Moneycontrol News**

The market staged a smart recovery in Tuesday’s session led by short coverings but Nifty failed to close above its crucial level of 10,700 towards the end of the session. It did manage to 50-DMA, 5-EMA, as well as 50-EMA.

The Nifty50 formed an ‘Inside Bar’ kind of pattern on the daily candlestick charts on Tuesday which suggests that a change in trend could be in the offing. The index is still stuck in a range and now a close above 10,736-10,785 could take the Nifty to higher levels.

On the other hand, strong support is placed at 10,603 as well as 10,550\. Things could shift on the downside if trade tensions between the US and China escalates. The US market will remain shut on account of Independence Day holiday.

A trade below 10,550 can trigger a correction to levels around 10,440 and then 10,360\. The RSI is also oscillating between the range of 37 and 62, which indicates that the bias could remain sideways in the short term.

The volatility index ended down by 2.77 percent at 13.00 and trading at the lower end of the range indicating indecisiveness amidst the bulls and the bears.

The Rupee overcame early weakness to trade 14 paise higher at the time when the equity markets closed. The markets breadth was positive with an advance decline ratio of 1.08:1.

The PSU Banks were not helped by the Government’s resolution plan and both the PSU Banks and the private ones closed lower. The shining stars in Tuesday’s session were pharma and IT sectors which rose 1-2%.

If we look at the institutional activity – FIIs sold share worth Rs 1043 crore while the DII bought shares worth 278 crore, according to provisional data.