The Nifty remained under pressure throughout the session on April 11, weighed down by weak global cues and caution ahead of IT major TCS’ numbers that would ring in the earnings season.
IT, financial services, FMCG, auto stocks and a few banking names pulled the market down with the index closing at 17,675, down 109 points after hitting an intraday high of 17,779 and low of 17,651.
As the index closed lower than the opening level, it formed a bearish candlestick on the daily charts.
“As technical trends are mixed at this point in time, indices may be bound to remain volatile going forward. However, as long as bulls are able to defend 17,600 levels, the Nifty shall remain sideways with a positive bias. In that scenario, the strength shall initially extend towards 18,100 levels,” Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia said.
If the index breaches 17,600 on a closing basis, it will pave the way for more weakness and the downswing can extend into 17,400– 17,350, where some meaningful support exists, he said.
Also read: Taking Stock | Market dragged by IT stocks as TCS opens earnings season
For the time, it would be prudent to remain neutral, while long index positions should be held with a stop-loss below 17,600, Mohammad said.
India VIX, the fear index inched up 3.29 percent to close at 18.27 levels, which is still a comfortable level and is attracting buying interest on declines and holding the index at support zones, experts said.
The options data indicated that the Nifty could see a wider trading range of 17,400-18,000 in the coming sessions.
Maximum Call open interest was seen at 18,000 strike followed by 19,000 strike, while maximum Put open interest was seen at 17,500 strike followed by 17,000 strike. Marginal Call writing witnessed at 17,800 strike then 17,700 strike, while there was Put writing at 17,700 strike then 17,600 strike.
Positive setup was seen in Ambuja Cements, Hindustan Aeronautics, Torrent Power, ACC, Syngene International, Grasim, Bata India, Adani Ports, Bharat Electronics, Vedanta, DLF, Page Industries, JSW Steel, Ashok Leyland, UPL, Chambal Fertilizers and ICICI Bank, said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
Weakness was seen in L&T Technology Services, Pidilite Industries, HCL Technologies, L&T, Infosys, Wipro, L&T Infotech, ICICI Lombard General Insurance and Coforge, he added.
The Bank Nifty opened negative at 37,592 and drifted towards 37,500 in the morning trade. It managed to hold the immediate support zone with the formation of higher lows of the last two sessions and bounced towards 37,950.
It closed 138 points down at 37,614 and formed a Doji candle on the daily scale.
“It has got stuck in a trading range and witnessing tug of war between the bulls and the bears to make or break 37,777 levels. Now, it has to hold above 37,500, for an up move towards 38,000 and 38,250, whereas support can be seen at 37,400 and 37,300 zones,” said Taparia.
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