The Nifty50 extended losses for the second consecutive session on September 15, dragged by technology, pharma, select banking & financial services and FMCG stocks. The index witnessed a formation of the bearish candle on the daily charts and closed below the psychological 18,000-mark on the weekly expiry day.
The index has made an attempt for the third straight session to surpass 18,100 but failed. Hence, 18,000-18,100 is expected to be a crucial area to watch going ahead and if the index decisively surpasses the same then a march towards record high levels is highly likely, with crucial supports at 17,700 & 17,500 levels, experts said.
The broader markets fared much better than the 50-share benchmark index as the Nifty Midcap 100 gained 0.4 percent and Smallcap 100 index ended flat. The breadth was slightly tilted towards losers as about 1,122 shares declined against 855 advancing shares on the NSE.
The Nifty50 started off the day higher at 18,046 and climbed up to 18,096, but lost momentum in early trade itself. The index hit an intraday low of 17,861 but respected the previous day’s low of 17,770. Hence unless and until that holds (17,770), there is a possibility that the index can get back into momentum, experts said.
The 50-share index settled at 17,877, down 126 points.
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“Nifty has formed a bearish candle on daily charts and a double top formation on intraday charts indicating continuation of weakness in the near future,” Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities said.
He feels the trading set-up suggests that a fresh round of selling is possible only after the dismissal of the 17,800 support level.
If the index trades above 17,800, then it could retest the level of 18,100- 18,150. On the flip side, below 17,800, a quick intraday correction is not ruled out. Below which, it could slip to 17,700-17,650, the market expert said, adding the volatility would continue due to concerns of a hawkish stance on rate hikes from the central banks amid rising inflation.
India VIX, which measures the expected volatility in the market, remained above the 18 mark, rising by 0.62 percent to 18.39 levels. It needs to fall sharply to get stability in equity markets.
On the Options front, we have seen maximum Call open interest at 18,000 strike followed by 18,500 strike while the maximum Put open interest at 17,000 then 17,500 strike.
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The Call writing was seen 18,000 strike then 17,900 strike while Put writing was seen at 18,000 strike then 17,500 strike. The Option data indicated that in the immediate term, the index may see a trading range of 17,600 to 18,100 levels.
Bank Nifty opened positive at 41,534 and made a fresh lifetime high level of 41,840 in the initial tick. It witnessed zig-zag movements throughout the day and tested 41,150 during the day.
The banking index formed a small-bodied bearish candle on a daily scale and closed with losses of 196 points at 41,209. Now, it has to hold above 41,250 levels to make an up move towards 41,500 and its lifetime high of 41,840 levels, whereas supports are placed at 41,000 and 40,750, Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
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