The Nifty ended with moderate losses on November 18 to close 36 points down at 18,308, continuing the downtrend for the second day.
After the initial uptick, the Nifty traded lower for the rest of the session and formed a bearish candle on the daily charts though it managed to hold the crucial 18,300 level. The break of the level can drag the index to 18,100-18,000 but if it is held, the Nifty can move to 18,450-18,500.
On the weekly timeframe, too, the index formed a bearish candle that resembled the Spinning Top formation, which indicates indecisiveness among bulls and bears but sometimes can give a reversal sign.
The index lost 0.2 percent during the week after rising 6.7 percent for the previous four weeks.
“The short-term momentum indicators have been showing negative divergence, which is a sign of weakness and the price action is expected to follow the suit,” Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan by BNP Paribas said.
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The Nifty can tumble to 18,100-18,000 in the short term, he said. On the higher side, 18,450 will act as resistance.
The broader markets also continued to reel under selling pressure. The Nifty Midcap 100 and smallcap 100 indices lost half a percent each on weak breadth. About 1,267 shares declined against 718 advancing shares on the NSE.
On the options front, the maximum Call open interest remained at 19,000 strike followed by 18,500 strike, with Call writing at 18,400 strike then 18,500 strike.
The maximum Put open interest was at 18,000 strike followed by 17,500 strike, with Put writing at 18,300 strike then 18,200 strike.
The Nifty’s immediate trading range shifted lower to 18,200-18,500 from 18,200-18,500 levels earlier.
The volatility index India VIX, however, was down by.27 percent to 14.39 levels, which is largely supportive of the market.
Banking index
The Bank Nifty opened positive at 42,546. It failed to cross 42,600 and drifted lower but witnessed a good recovery from lows and finally closed 21 points lower at 42,437.
It formed a small-bodied bearish candle on the daily frame and negated its higher lows formation of the last five sessions.
On the weekly frame, it formed a bullish candle, rising seven-tenth of a percent. It has been making higher highs for five weeks and gave its best closing.
“Now it has to hold 42,350 level to make a move towards 42,750 and 43,000 levels, with supports at 42,250 followed by 42,000,” Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
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