Technical View: Nifty forms bearish candle, likely to remain in 10,900-11,150 range

August 20
18:29 2019

Nifty closed rangebound session lower on August 19 but managed to hold psychological 11,000 level amid mixed global cues and hope of stimulus from the government to revive the economy.

The index formed bearish candle on daily charts as selling pressure was seen at higher levels while at the same time decline was bought.

Index has been consolidating in a range from past six trading sessions and it requires a decisive range breakout of the trading band to get a smooth ride else a volatile swing could continue with downside support at 10,950 then 10,900 levels, experts feel.

Nifty after opening higher turned volatile throughout the session. The index touched an intraday high of 11,076.30 and low of 10,985.30, before closing down 36.90 points at 11,017.

“Nifty remained in a range of 91 points before signing off the session with a bearish candle suggesting a continuation of negative bias unless it registers a strong close above 11,150,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, told Moneycontrol.

He said if weakness persists even in next session then the correction can initially get extended up to 10,900 but if bears manage a close below the critical support of 10,900 then a directional move on downside shall emerge which should ideally threaten the recent corrective swing lows of 10,782.

Traders for time being should maintain a neutral stance till directional move emerges, he advised.

On the Options front, maximum Put open interest is at 11,000 followed by 10,800 strike while maximum Call open interest is at 11,000 followed by 11,500 strike.

Minor Call writing is at 11,100 followed by 11,000 strike while Put unwinding is at all the immediate strikes with minor Put Writing at 10,800 strike.

India VIX fell by 0.7 percent to 16.63.

Bank Nifty is finding hurdle near to upper band of its trading range and consolidating in between 27,500 to 28,500 from past ten trading sessions.

The index closed 203.65 points lower at 27,982.45 and formed a bearish candle on the daily scale as supply pressure was seen at higher levels.

“The index needs to hold and sustain above 28,000 to witness a bounce towards 28,350 then 28,500 while on the downside supports are seen at 27,750 then 27,500 levels,” Chandan Taparia of Motilal Oswal said.Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.

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