The Nifty ended flat amid volatility on December 5, as the Reserve Bank of India started its three-day monetary policy meeting, the last for the year 2022, with the central bank expected to moderate the pace of the rate hike.
The index opened a tad higher at 18,719 and moved in a 100-point range through the day. It closed at 18,701, up 5 points and formed a Doji pattern on the daily charts, indicating indecisiveness among bulls and bears.
As long as Nifty holds 18,600-18,500, there is no major cause of concern as the index is expected to move towards the 19,000 mark once the RBI meeting is over, experts said.
“After the early morning selloff, the Nifty took support near 18,600 and reversed sharply. However, the short-term texture of the market is still non-directional. We are of the view that 18,600 could act as a sacrosanct support zone for the market,” Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities said.
If the index trades above 18,600, it can retest 18,800-18,850 in the near future. A slip below 18,600, can take the index to 18,500-18,450, the market expert said.
The options data indicates that the Nifty may trade in the 18,500-19,000 range in the near term.
The maximum Call open interest was at 19,000 strike followed by 20,000 strike, with Call writing at 18,800 strike then 18,700 strike.
On the put side, the maximum open interest was at 18,000 strike followed by 18,500 strike, with Put writing at 18,700 strike.
The broader market continued to trade higher for the fourth consecutive session, with the Nifty midcap 100 rising 0.25 percent and the smallcap 100 index 0.4 percent.
The India VIX, which indicates the expected volatility in the market over the next 30 days, increased 2.1 percent to 13.73 levels from 13.45, which experts say is still not a cause of concern as long as it holds lower.
Banking index
The Bank Nifty opened positive at 43,269 and saw support based buying to hit the day’s high of 43,372 in late trade.
The index closed 229 points higher at 43,333 and formed a Doji candle on the daily frame.
“The banking index has to hold above 43,250 level to make a march towards 43,500 and 43,750 levels, with supports at 43,000 and 42,750 levels,” Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
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