Technical View | Nifty forms bearish candle on FO expiry day, 17,900 key for upside in April series


The Nifty remained range-bound and closed with moderate losses on March 31, the expiry day for monthly futures & options contracts.

The index snapped its three-day winning streak on the last day of the financial year 2021-22 and formed a small-bodied bearish candle on the daily chart as the closing was lower than the opening level.

After opening at 17,519, the Nifty climbed to 17,560 but erased the gains in late morning deals to sink to the day’s low of 17,435 in the last hour of trade. The index closed 33.5 points lower at 17,465 amid volatility.

Experts said 17,900-18,000 could be a crucial hurdle for the index and 17,000 could act as a strong support in April series.

FMCG and select banking & financials lent support to the market, whereas Reliance Industries, some IT and pharma stocks weighed the market down.

“The Nifty remained range-bound on the expiry session as trading is confined to 125 points. To regain strength, bulls need to get past 17,560 with a strong upward move. In that scenario, eventually, a higher target of 17,900 can be witnessed,” said Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia.

Also read: Gainers & Losers: 10 stocks that moved the most on March 31

On the downside, a close below 17,387 can damage the positive momentum, which may weaken to 17,000, Mohammad said.

Traders should remain neutral unless a strong move is visible in the upward direction, which can be a buying opportunity for the index traders.

The options data indicates that the Nifty could see a wider trading range of 17,000-18,000 in the April series.

On the options front, maximum Call open interest was seen at 17,500 strike followed by 18,000 strike, while maximum Put open interest was witnessed at 16,000 strike followed by 17,000 strike. Marginal Call writing was seen at 17,500 strike then 18,000 strike, while Put writing was seen at 17,000 strike.

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India VIX, the fear index was down 0.24 percent to 20.56.

Banking index

The Bank Nifty opened positive at 36,457 and outperformed the frontliners but underperformed the broader market. It moved in a range and closed 39 points higher at 36,374, forming a small-bodied bearish candle on the daily scale.

“The index has been making higher highs from the last four sessions. Now, it needs to hold above 36,250 to move up towards 36,600 and 36,750 levels, whereas support can be seen at 36,000 followed by 35,750,” said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.

Broader markets did better than the benchmarks. The Nifty midcap 100 and smallcap 100 indices gained 0.3 percent and 0.7 percent.

Tata Consumer Products, Axis Bank, M&M, Hindustan Aeronautics, Bharat Electronics, NALCO, PVR, Jindal Steel & Power, Bandhan Bank, United Breweries, NMDC and HUL saw a positive setup, said Taparia. Hindlaco Industries, Divis labs, Mindtree, L&T Infotech, Apollo Hospitals, Bank of Baroda, Piramal Enterprises and Zee Entertainment Enterprises saw weakness.

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