The Nifty50 moved in a 100-point range for the most part of the session to close 15 points lower at 16,569.5 on June 6 on mixed global cues. Oil rising to $ 120 a barrel after the price hike by Saudi Arabia and caution ahead of the RBI monetary policy committee decision could be the reasons for volatility in the market, experts said
Experts said the 16,400-mark, which the index defended stoutly on June 6, could continue to act as crucial support in the coming sessions but a breach of it could see the index plunge to 16,000.
As the index closed above the opening level, it formed a bullish candle on the daily chart.
“Smart recovery from the intraday low of 16,444 levels once again confirmed that the index is still in a trading range between 16,400 and 16,700 levels,” Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia said.
The broader space, too, was weak. The Nifty midcap 100 index fell 0.11 percent and smallcap 100 index dropped 1 percent.
In the last four sessions, the Nifty thrice slipped into the bullish gap zone of 16,506 and 16,370, registered on May 30, and recovered with intraday lows at around 16,440. Hence 16,440 may be emerging as critical short-term support and a breach can strengthen the bears, with initial targets placed at around 16,000, Mohammad said.
The market should remain rangebound inside 16,440 and 16,700 for quite some time before witnessing a breakout in either direction.
Options data also indicated that the Nifty could remain in range of 16,400 to 16,800 levels in the coming sessions.
On the options front, maximum Call open interest was seen at 17,500 strike followed by 17,000 strike, while maximum Put open interest was seen at 16,000 strike. Call writing was witnessed at 16,800 strike then 16,900 strike, while minor Put writing was seen at 16,700 strike.
Volatility is expected to remain high and could favour bears as India VIX, the fear index, remained at around 20, rising 1.13 percent to close at 20.20 levels.
The Bank Nifty opened negative at 35,159 but managed to bounce to 35,425. It, however, failed to hold at higher zones and closed 35 points higher at 35,310.
It remained in a range of 300 points for the most part of the session and formed a small-bodied bullish candle on the daily scale.
It has to hold above 35,250 to move towards 35,750 and 36,000, while on the downside, support is seen at 35,000 and 34,750, Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services, said.
On the stock front, a positive setup was seen in Bajaj Auto, ICICI Prudential Life Insurance, Bandhan Bank, Cipla, Tata Consumer Products, Max Financial Services, Federal Bank, ITC, Kotak Mahindra Bank, Infosys and Bharat Electronics.
However, weakness was seen in Coforge, Indian Energy Exchange, Deepak Nitrite, BPCL, Asian Paints, HPCL, Colgate Palmolive, UltraTech Cement, Bharat Forge, ICICI Lombard General Insurance and Grasim, he added.
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