Technical View: Nifty forms small bullish candle, but may remain choppy ahead of weekly expiry


The Nifty50 continued to trade in a rangebound manner but the rally in the last hour helped it settle 1 percent higher on March 9. Banking & financials and IT stocks led the rally.

The index formed a small bullish candle on the daily charts as closing was higher than opening levels. Overall, the market has been rangebound since the recent major correction and may remain so in coming days too, experts feel.

Mazhar Mohammad of Chartviewindia advised traders to remain neutral, as the market may remain choppy and directionless ahead of weekly expiry and subsequent holiday.

India VIX declined by 8.85 percent from 24.67 to 22.49 levels, which also supported bullish bias.

The Nifty50 opened higher at 15,049.90, but volatility dragged the index to the day’s low of 14,925.45. The index recovered losses and extended gains to touch a day’s high of 15,126.85 in late trade. At close, Nifty was up 142.20 points or 0.95 percent at 15,098.40.

“Although Nifty50 remained volatile and choppy for the better part of the trading session, the last one hour appears to have slightly tilted the tide in favour of bulls as the index rallied almost 100 points. Moreover, close observation of the last three trading sessions reveals that the index is trying hard to form a base around 14,900 levels and hence today’s late recovery with a close around 15,100 shall augur well for bulls as it may be paving the way for a further rally in the next trading session,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia told Moneycontrol.

According to him, if Nifty sustains above 15,100 in the next session then it should move higher towards 15,276 levels.

Contrary to this, a failure to sustain above 14,900 on a closing basis take the index towards 14,600 levels, he said.

The weekly expiry will take place on Wednesday, March 10, one day before the normal expiry day. The market will remain shut on Thursday, March 11 for Mahashivratri.

On the option front, maximum Put open interest was seen at 14,000 followed by 14,500 strike while maximum Call open interest was at 16,000 followed by 15,500 strike. Call writing was seen at 15,600 then 15,500 strike while Put writing was seen at 15,000 then 14,500 strike. Option data suggested that the Nifty could see an immediate trading range of 14,900 to 15,250 levels in coming sessions.

In a highly volatile session, Bank Nifty opened in the green at 35,705.90 and moved in a range of 500 points. Banking stocks saw positive momentum and as a result, the index was holding well above 35,500 levels. It concluded the day with gains of 589.90 points or 1.67 percent at 35,865.70 and formed a bullish candle on the daily scale.

“Bank Nifty is forming higher highs – higher lows from the last two sessions. Now it has to continue to hold above 35,500 levels to witness an up move towards 36,250 and 36,500 while on the downside support is seen at 35,250 then 35,000 levels,” Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.

On the stocks front, bullish setup was seen in Kotak Mahindra Bank, ICICI Bank, Tech Mahindra, Mindtree, TCS, Escorts, Cholamandalam Investment, Asian Paints, HCL Technologies, BHEL and Infosys.

Meanwhile, weakness was seen in BPCL, NMDC, Tata Steel, Motherson Sumi, Jindal Steel, Sun TV Network, Container Corporation, PVR, Ashok Leyland, Tata Motors, Bank of Baroda and Godrej Consumer Products, he added.

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