The Nifty recovered smartly from the day’s low amid volatility on November 3 to end 30 points lower at 18,053 as a 75 basis points hike in interest rates and hints of further hikes by the US Federal Reserve weighed on sentiment.
The index fell below the psychologically vital 18,000 mark intraday but recovered to close above it. The index formed a bullish candle on the daily charts as the closing was higher than the opening level.
The level of 18,000 remains crucial for either side of the trade.
Experts expect range-bound trade to continue in the coming sessions and if the index breaches the high of November 2 (18,178), 18,350 will be the next level to watch.
“Once the level of 18,000 is breached on a closing basis then the Nifty will be set to test 17,800 on the downside. On the higher side, 18,200 will be the resistance for the short term,” Gaurav Ratnaparkhi, head of Technical Research at Sharekhan by BNP Paribas, said.
He said 17,800-18,200 will be the short-term consolidation range, within which, the index is expected to move towards the lower end.
Also read: RBI to follow suit as US Fed raises 75 bps: Experts
On the options front, we have seen maximum Call open interest at 18,500 strike followed by 19,000 strike, with Call writing at 18,400 strike then 18,500 strike.
The maximum Put open interest was seen at 17,000 strike followed by 17,500 strike, with Put writing at 18,000 strike then 17,800 strike. The data suggests that the Nifty may trade in the 17,900-18,300 range in the near term.
India VIX, a gauge of volatility expected in the market over the next 30 days, was down 4.32 percent to 15.94 levels.
The broader markets outperformed the frontline indices even though the breadth favoured bears.
The Nifty midcap 100 and smallcap 100 indices were up 0.34 percent and 0.24 percent. About 1,061 shares declined against 912 advancing shares on the NSE.
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Banking index
The Bank Nifty opened negative but saw a quick pullback in the initial tick. It touched an intraday high of 41,478 and closed 152 points higher at 41,298.
The banking index has formed a bullish candle on the daily frame after taking support at 40,800.
“Now it has to hold above 41,250 to make move towards 41,650 and 41,840 levels, whereas the index may see support at 41,000 followed by 40,750,” Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services, said.
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