Technical View | Nifty forms a bullish candle, 17,000 is the level to watch


The Nifty pulled back from the opening lows to narrow the losses and closed 0.43 percent lower at 17,241 on October 10, as traders turned cautious ahead of the release of the minutes of the US Federal Reserve meeting later in the week and earnings season.

The index opened more than 200 points down at 17,094 and slipped to 17,065. As the day progressed, it recouped losses to climb to 17,280 and ended the day at 17,241. All sectoral indices, barring information technology, ended in the red.

The index defended the psychologically vital 17,000 mark as well as 17,150-17,200 by showing more than 200 points recovery from the day’s low and formed a bullish candlestick on the daily charts.

Hence, 17,000 will be a crucial level in the coming days. A break of it can pull the index down to 16,800, while 17,500 will be the key hurdle on the upside, experts said.

“For traders, the support has shifted to 17,150 from 17,050. Above the 17,150, the index could retest the level of 17,400-17,450,” Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities said.

On the flip side, a fresh round of selling is possible only after the dismissal of 17,150. Below which, the index can slip to 17,050-17,000, the market expert said.

The broader markets also ended in the red. The Nifty midcap 100 and smallcap 100 indices fell a percent and half a percent, respectively, on weak breadth. About two shares declined for every share rising on the NSE.

Also read: Taking Stock | Sensex falls 200 points, Nifty below 17,300 amid volatility; IT stocks outshine

The volatility index India VIX was up 4.3 percent to 19.62.

On the options front, the maximum Call open interest was seen at 18,000 strike followed by 17,000 and 17,500 strikes, with Call writing at 17,100 strike then 17,000 and 18,000 strikes.

The maximum Put open interest was seen at 17,000 strike followed by 16,500 and 17,100 strikes, with Put writing at 17,100 strike then 17,000 and 17,200 strikes.

The options data indicates that the Nifty is expected to trade in the range of 17,000-17,500 levels in the immediate term.

Also read: Equity inflows surge in September despite volatile stocks: AMFI data

The banking index

The Bank Nifty opened more than 500 points lower at 38,641 but showed a smart recovery to turn positive around noon, rising to 39,316 only to lose the momentum in the afternoon. It settled 85 points down at 39,093, forming a bullish candle on the daily charts.

“The Bank Nifty index managed to hold the support of 38,500 on the downside, which should act as make or break. The index, on the upside, faces stiff resistance at 39,500 where aggressive Call writing has been witnessed,” Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities said.

The index needs to break this range on either side for trending moves. Within the range, the index remains in a buy-on-dip mode, with immediate support at 38,800, the expert said.

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