The Nifty again ended flat with negative bias in the highly volatile session on February 18, forming a bullish candle with a long upper shadow on the daily scale.
Nifty50 continued its struggle around its 20-day SMA for the third session in a row. Even on weekly charts, it registered an indecisive formation that resembles a spinning top, Mazhar Mohammad, Founder and Chief Market Strategist at Chartviewindia, said. The Nifty closed 17.60 points, or 0.10 percent, lower at 17,304.60.
“Going forward, strength in the index shall not be expected unless it closes above 17,400 levels. On such a close, the current pullback swing can expand towards 17,640 levels,” he added.
“Contrary to this if the weakness continues below 17,200 levels, the index shall slide down into the zone of 16,900–16,800 levels,” Mohammad said.
For now, buying should be considered only on a close above 17,400 levels whereas intraday shorting can be done below 17,200 for targets towards 17,100–17,050 levels, he added.
Higher volatility suggests a roller coaster ride in the market with acceleration to the bears, with volatility Index (India VIX) was marginally up by 0.75 percent from 22 to 22.16 levels.
The option data suggests a trading range between 17,000 and 17,500 zones.
On the Option front, Maximum Call OI (open interest) is at 18,000 and 17,500 strike while Maximum Put OI is at 17,000 and 16,500 strike. Call writing was seen at 18,000 and 17,800 strike while Put writing is seen at 17300 and 16,800 strike.
The banking index
Bank Nifty opened negative but managed to hold support near 37,250 zones and moved in a consolidative manner throughout the day. Momentum is lacking in the banking stocks and the index closed on a flat to positive note.
It formed a Bullish candle on the daily scale with a long upper shadow and a Doji sort of candle on the weekly frame.
Till it remains below 37,750, weakness may be seen towards 37,250 and 37,000 zones whereas hurdles exist at 38,000 and 38,250 zones, said Chandan Taparia, Vice President, Analyst-Derivatives at Motilal Oswal Financial Services.
On the stock front, the positive setup was seen in Coal India, Voltas, Berger Paint, HDFC, L&T, Bajaj Auto, Kotak Mahindra Bank, SBIN and HDFC Bank, while weakness is seen in Ambuja Cements, Motherson Sumi, PEL, Astral, Dixon, Naukri, Nam India, LIC Housing, Apollo Tyre, Ramco Cement, Coforge, SRF, ACC, UltraTech Cements and CUB.
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