The Nifty traded lower for most of the session to close in the red on March 25 but still managed to hold strong above the crucial 17,000- mark, fanning hopes of a healthy uptrend in the coming sessions.
The index formed a bearish candle on the daily as well as weekly charts as the closing was lower than the opening levels. It shed 0.8 percent during the week after having gained 6.4 percent in the previous two weeks.
The volatility cooled down 2 percent to 23.43 levels on March 25 but on weekly basis, it went up 3.6 percent. Until it slips to around 20 and stays there for a while, the market is unlike to stabilise, experts said.
After opening higher at 17,289, the Nifty remained in a 100-150 points range for most of the session. It dropped to the day’s low of 17,076 in the afternoon before seeing some recovery to settle at 17,153, down 70 points.
“The Nifty50 appears to be in a consolidation mode, after two consecutive strong closes on weekly charts, as the trading range for the current week remained only 435 points,” said Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia.
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As long as the Nifty doesn’t go below the psychological support of 17,000, which coincides with the 200-day moving average, the probability of the resumption of upswing remains high, though it will be confirmed on a close above 17,450 levels.
For the time, for long positions, a close below 17,000 can be the better stop-loss, Mohammad said.
The options data also indicates that 17,000 is going to be a crucial support level in the immediate term and 17,400-17,500 could be a hurdle, which once passed could push the market to 17,900-18,000.
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On the options front, maximum Call open interest was seen at 18,000 strike, followed by 17,500 strike, while maximum Put open interest was seen at 16,000 strike then 17,000 strike.
Call writing was seen at 17,500 strike then 17,200 strike, while Put writing was seen at 17,000 strike followed by 17,200 strike.
Banking index
The Bank Nifty opened positive at 35,700 but failed to hold above it and drifted lower to hit the day’s low of 35,204. It recovered from the low but failed to close above 35,500, down 117 points at 35,410.
The index formed a bearish candle on the daily and weekly charts.
“Now it has to hold above 35,250 levels to march towards 35,750 and 36,000, whereas support can be seen at 35,000 and 34,750 levels,” said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
On the stock front, Container Corporation, L&T Finance Holdings, InterGlobe Aviation, Indian Hotels, PVR, Godrej Properties, DLF, Adani Enterprises, Nippon Life India Asset Management, Polycab India, Biocon, Dr Reddy’s Laboratories, Tata Power and Reliance Industries saw a positive setup, said Taparia.
Weakness was seen in Indus Towers, Titan Company, Muthoot Finance, Indraprastha Gas, Max Financial Services, and Amara Raja Batteries, he added.
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