Stock Market Today:
The Nifty extended losses for a second consecutive session on April 6 as banks, financial services, IT and auto stocks weighed down the market.
The index opened lower at 17,843 and slipped to the day’s low of 17,780, but held on to support of 17,700. The index settled at 17,808, down 150 points.
It formed a small-bodied bearish candle on the daily charts as the closing was lower than the opening level. Experts, however, said as long as the index holds its crucial support of 17,700, a bounce-back is likely towards recent highs.
“The Nifty50 is still sustaining above the bullish gap zone of 17,791 and 17,703 levels. If it dips further in this zone then the index should attract some buying interest,” said Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia.
If the index sustains above 17,703, it can test recent highs of 18,115 levels but for intraday traders, some resistance can be expected around 17,920 levels.
Weakness can be expected if the Nifty fails to sustain above 17,700 on a closing basis, he said.
The current weakness is an opportunity to create longs with a stop-loss below 17,700, Mohammad said.
Also read: Taking Stock | Profit booking pulls Nifty to 17,800; Sensex falls 566 points; power stocks gain
Volatility also increased for yet another session with India VIX closing 2.89 percent higher at 19.02 levels, but still below crucial 20 mark. Hence, experts feel overall lower volatility (below 20 mark) could attract buying interest on declines.
Also read: Gainers & Losers: 10 stocks that moved the most on April 6
On the the options front, maximum Call open interest was seen at 18,000 strike followed by 19,000 strike, while maximum Put open interest was witnessed at 17,500 strike followed by 17,000 strike. Marginal Call writing was seen at 17,900 strike then 18,000 strike, while Put writing was seen at 17,500 strike then 17,600 strike.
An immediate trading range of 17,500-18,200, indicated by the options data, remains largely unchanged.
Among stocks, there was a positive setup in Indian Hotels, Tata Power, SAIL, Container Corporation, NALCO, Bank of Baroda, Coal India, Vedanta, HPCL, NTPC, Jindal Steel & Power, IOC, Canara Bank, AU Small Finance, Bank, NMDC, Power Grid Corporation, BPCL, Tata Steel, Torrent Power, City Union Bank, Bharti Airtel, BHEL and DLF, said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
Weakness was seen in IRCTC, Mphasis, HDFC, Torrent Pharma, Tech Mahindra, Infosys, HCL Technologies and Apollo Hospitals, he added.
Banking index
Private banks corrected for yet another session, one of the reasons for the market correction as they had rallied sharply on April 4.
The Bank Nifty opened gap down at 37,711 and underperformed the broader markets, trading lower the entire session.
The index moved in a consolidative manner and closed 435 points down at 37,633, forming a bearish candle on the daily scale.
“The Bank Nifty has to hold above 37,500 levels to see an up move towards 37,750 and 38,000 levels, whereas support can be seen at 37,250 and 37,000 levels,” said Chandan Taparia.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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