The Indian market crashed on May 19 amid a global meltdown and mounting worries about inflation eating into earnings and slowing economic recovery.
Selling across sectors saw the Nifty plunge 430.90 points, or 2.65 percent, to close at 15,809.40. The index can slip to 15,735 and 15,500 if it stays below 16,000, whereas hurdles are at 16,061 and 16,161, experts said.
“If the Nifty slips below 15,670 levels in the next session, then the slide shall initially continue towards 15,400 levels but the new downside target shall remain at 15,041,” Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in, said.
As some technical oscillators on the weekly charts reached a deeply oversold zone, a sideways consolidation cannot be ruled out.
For the time, trade is decisively in the favour of bears and hence investors are advised to confine themselves to the fences, he said.
The options data suggests a wider trading range between 15,400 and 16,300 due to higher volatility.
On the options front, maximum Call OI (Open Interest) is at 17,000 then 16,000 strike, while maximum Put OI is at 15,000 then 15,500 strike.
Call writing is seen at 16000 then 16100 strike, while Put writing is seen at 15800 then 15500 strike.
“Volatility spiked to higher zones which paved way for the bears and needs to come down for market stability,” said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
India VIX was up by 10.14 percent from 22.29 to 24.55 levels.
Banking index
The Bank Nifty opened gap-down in line with the broader market and traded lower for the most part of the session. It tested a low of 33,180 and rebounded slightly to close 850 points lower at 33, 316.
It formed a bearish candle on the daily scale and negated the higher highs of the previous two sessions.
“Now till it holds below 33,666, weakness could be seen towards 33,000 and 32,500 zones whereas resistances exist at 33,666 and 34,000 zones,” Taparia added.
Among sectors, a positive setup was seen in ITC, HAL and TVS Motor. Weakness was seen in Manappuram Finance, Coforge, Lupin, Aurobindo Pharma, Wipro, HCL Technologies, Mindtree, Naukri, IGL, Infosys, L&T Infotech, Tech Mahindra, TCS, Can Fin Homes, NAM India, RBL Bank, Canara Bank, Astral, Tata Steel and Sun TV.
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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