Technical View | Nifty defends 16,900, forms bullish candle


The Nifty ended flat on May 2 on another volatile day during which the index fell nearly 200 points but recovered in late trade. Recovery in global counterparts and buying in HDFC after quarterly earnings and HDFC Bank supported the market.

After opening sharply lower at 16,924, the index remained in the negative terrain throughout the session and slipped to the day’s low of 16,917. It ended at 17,069, down 33.40 points.

As the index closed above the opening tick, it formed a bullish candle on the daily chart. It strongly defended not only 16,900 and 200-day exponential moving average (EMA) but also the psychologically vital 17,000-mark. If the index sustains these levels, 17,400 could be easily achieved in the coming days, experts said.

As the index smartly bounced back on a couple of occasions from sub 16,900 levels, a close below 16,900 can significantly weaken it with the near-term target of 16,400, Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia said.

For, the time, bravehearts who want to remain on the long side of the index can place a stop-loss below 16,900 on a closing basis and look for a target of 17,400, the market analyst advised.

Volatility remained high at above 20 levels, which suggests that there could be wild swings in the market. India VIX was up by 4.46 percent at 20.28 levels.

Options data suggests a wide trading range of 16,700- 17,400 for the Nifty.

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 witnessed at 16,500 strike then 16,000 strike.

Marginal Call writing was seen at 17,000 strike followed by 17,500 strike, while Put writing was seen at 16,500 strike then 17,000 strike.

The broader market also continued to trend lower and underperformed the frontliners. The Nifty Midcap 100 index fell six-tenth of a percent and smallcap 100 index declined 1.3 percent.

Banking index

The Bank Nifty opened negative at 35,628 but managed to hold its opening zone and made a good recovery to hit the day’s high of 36,235 in the last hour.

It formed a bullish candle on the daily scale and closed at 36,164, up 75.60 points. “It has to hold above 36,000 levels to see an up move towards 36,250 and 36,666 levels, whereas supports are placed at 35,750 and 35,500 levels,” Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services, said.

On the stock front, a positive setup was seen in Tata Chemicals, IndusInd Bank, LIC Housing Finance, Coal India, Coromandel International, Shriram Transport Finance, Indian Hotels, Power Grid Corporation of India, Tata Steel, Ambuja Cements, ITC, HDFC Bank and UPL.

Weakness was seen in Dixon Technologies, Aarti Industries, Dr Lal PathLabs, Astral, Motherson Sumi Systems, Apollo Hospitals Enterprises, Bharat Forge, Titan Company, L&T Technology Services, Mphasis, RBL Bank and Wipro.

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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