The Nifty50 snapped a three-day losing streak to close 84 points higher at 18,244 on November 22 on positive global cues and gains in the banking names.
The index formed a bullish candle on the daily charts as the closing was higher than the opening tick.
The index has been moving in the 18,000-18,450 range and the consolidation is expected to continue in the coming sessions for want of triggers on the domestic front. Monthly expiry-led volatility is also likely, experts said.
“The Nifty has stepped into a short-term consolidation and the overall structure shows that the consolidation is here to stay for the next one-two weeks. Within this consolidation, the Nifty is expected to witness swings in both directions,” Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas said.
In the last couple of sessions, the index formed the first leg on the downside and closed in on the 20-DMA (18,113). Consequently, the Nifty bounced back on November 22. The bounce can take the index to the hourly upper Bollinger Band, which is near 18,300, where the index is likely to attract selling pressure again, Ratnaparkhi said.
Overall, short-term consolidation is expected in the 18,000-18,450 range, the market expert said.
As per the options data, the Nifty is expected to trade in the 18,000-18,400 range as the maximum Call open interest was seen at 18,300 strike followed by 18,400 strike and maximum Put open interest at 18,200 strike then 18,000 strike.
The maximum Call writing was seen at 18,500 strike followed by 18,450 strike, while the maximum Put writing was at 18,200 strike then 18,100 strike.
The volatility cooled further extending support to the market. India VIX, which indicates expected volatility over the next 30 days, was down 6.45 percent to 13.84.
The banking index
The Bank Nifty opened higher at 42,467 but slipped and moved in a narrow range of around 120 points. It picked up strength in the last hour to close 110 points higher at 42,457.
The banking index formed a Doji candle on the daily frame, indicating indecisiveness among the bulls and the bears about the future market trend, Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
“Now, it has to hold above 42,350 level to make an up move towards 42,750 and 43,000 levels, with supports at 42,200 and 42,000 levels,” Taparia said.
The broader market had a mixed day, as the Nifty midcap 100 index gained half a percent and the smallcap 100 index closed flat due to weak breadth. About 1,064 shares declined against 925 advancing shares on the National Stock Exchange.
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