Technical View | Nifty forms Doji candle, may fall to 14,900 level


The Nifty index ended on a negative note for the sixth consecutive session in the extremely volatile session on June 17.

The index started the day on a negative note but soon erased the losses; however, it gyrated between gains and losses throughout the session before finishing below 15,300. The index formed a Doji kind of candle on a daily scale and a Bearish candle on the weekly frame.

“Going forward unless Nifty recovers and sustains above 15,360 levels, the trajectory of this market shall remain sideways with a negative bias. In case, if the index slips below 15,183 in the next session then the weakness shall extend towards 14,900 levels,” Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia said.

However, as the Nifty has fallen around 1,500 points, from the highs of 16,793, in the last 10 days most of the momentum oscillators not only reached oversold levels but some are displaying positive divergence on the lower time frame charts.

Hence, the next session can belong to bulls but short-term traders are advised to wait for more stability before initiating a trade, Mazhar added.

Volatility is at its higher zones paving way for a downside move by the bears. India VIX was down by 0.49 percent from 22.86 to 22.75 level.

On the Option front, Maximum Call OI (Open Interest) is at 16,000 then 16,500 strike while Maximum Put OI is at 15,500 then 15,000 strike. Call writing is seen at 15,500 then 15,600 strike while minor Put writing is seen at 15,200 then 15,000 strike.

Options data suggests an immediate trading range in between 15,000 to 15,700 zones while broader trading in between 14,800 to 16,000 levels.

Bank Nifty opened negative and remained under pressure for the first half of the session followed by recovery in the latter part. It recovered to 32,900 zones and closed with gains of around 125 points.

It outperformed the broader market and was comparatively resilient to the Nifty index. It formed a Bullish candle on the daily scale with support-based buying at lower zones but formed a Bearish candle on a weekly frame.

“Now, till it holds below 33,000 zones, weakness may be seen towards 32,250 and 32,000 zones whereas hurdles are placed at 33,333 and 33,500 levels, Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.

Among stocks, a positive setup was seen in Sun TV, Indus Tower, HAL, JSW Steel, Ashok Leyland, Reliance Industries, ICICI Bank, BEL, HDFC Bank, Coromandel, and ITC, while weakness in Titan, IndiaMart, Mphasis, Pidilite Industries, Escorts, Jubilant FoodWorks, Wipro, Trent, Mahanagar Gas, IOC, BPCL, Sun Pharma, Bata India, and Power Grid.

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