Technical View | Nifty forms bearish candle, experts say 17,440 is the level to watch


In a volatile trade, the Nifty wiped out all the day’s gains in the afternoon to close in the red on April 13, as banking, financial services and auto stocks dragged the market down.

The index opened higher at 17,600 and hit the day’s high of 17,664 but squandered the gains in the afternoon to fall to 17,457. The index finally settled 55 points lower at 17,476.

It formed a bearish candle on the daily and well as the weekly charts, as the closing was lower than the opening level. The index lost 1.7 percent during the week.

As the index managed to defend its immediate crucial support of 17,450 and the previous day’s low on a closing basis, as long as these levels are not breached in the coming days, the market can bounce back, experts said. A slip below the levels could pull the Nifty lower.

The India VIX fell 2 percent to 17.79 levels. The index staying below the crucial 20-mark would support the bulls and buying on declines will continue till it holds the level, experts said.

The market will be closed on April 14 on account of Mahavir Jayanti and Ambedkar Jayanti and Good Friday on April 15.

The Nifty signed off the truncated week with a small bearish candle on weekly charts as the trading range remained between 337 points. However, on the daily charts, the index tested its 20-day simple moving average (SMA) in the last two trading sessions, Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia said.

It is critical that the index stays above 17,440 on a closing basis to retain sideways bias. “If it fails to do so, then the index can be dragged towards its 200-day moving average whose value is placed around 17,150 levels,” he said.

A sideways consolidation should be expected as long as the Nifty manages to defend 17,400 and a close above 17,663 can be considered as an initial sign of strength in the near term, he said.

It would be prudent to remain neutral on the long side till some signs of strength are visible, Mohammad said.

On the options front, maximum Call open interest was seen at 18,000 strike followed by 17,500 & 19,000 strike, with Call writing at 17,600 strike then 17,500 and 18,000 strikes.

Maximum Put open interest witnessed at 17,500 strike followed by 16,500 & 17,000 strikes, with Put writing at 17,500 strike then 16,500 strike.

The options data indicates a range of 17,000-17,600 in the coming days.

The broader markets had a mixed closing. The Nifty Midcap 100 index fell 0.03 percent and the smallcap 100 index gained 0.2 percent.

Banking index

The Bank Nifty also opened higher at 37,887 and climbed to 37,989 but erased gains in the afternoon to drop to the day’s low of 37,408. It closed 284 points lower at 37,463 and formed a bearish candle on the daily chart.

“The Bank Nifty saw fresh short position built up in the future segment, indicating weakness. The index, however, is stuck in a broad range between 37,000 and 38,000 and a breach on either side will result in trending action,” Kunal Shah-Senior Technical & Derivative Analyst at LKP Securities said.

According to him, if the index breaches 37,000 next week, it will open room for further downside towards 36,000.

Disclaimer: The views and investment tips expressed by experts on are their own and not those of the website or its management. advises users to check with certified experts before taking any investment decisions.

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