Bulls took a breather on December 28 after a two-day run-up due to a lack of cues on the domestic as well as global fronts, and may be ahead of the expiry of monthly futures & options contracts on December 29. The Nifty50 has largely seen consolidation on Wednesday and closed flat with a negative bias, forming a bullish candle for the third straight session as the closing was higher than opening levels.
The index has retained the 18,100 level at close. If it maintains the said level, then 18,200-18,300 is likely to be the possibility in coming sessions, with strong support at 18,000-17,900 levels. But overall, it is expected to be a rangebound market, experts said.
Auto and oil & gas stocks supported the market, whereas the selling in select banks, IT, metal, and pharma stocks weighed on the sentiment.
The Nifty50 opened lower at 18,085 and remained rangebound around the 18,100 level throughout the session. Finally, the index fell 10 points to close at 18,123.
“The Nifty seems to have run into a roadblock after a two-day rise. However, a small intra-day range does not give enough signals for the future trend. The Nifty could now face resistance in the 18,173-18,203 band and take support from the 17,967-17,977 band in the near term,” Deepak Jasani, Head of Retail Research at HDFC Securities said.
On the Option front, maximum Call open interest was seen at 18,200 strike, which is expected to be the resistance area for the Nifty50 in the coming session, followed by 18,500 strike and 18,300 strike, with Call writing at 18,500 strike, and then 18,200 and 18,300 strikes.
On the Put side, the maximum open interest was seen at 18,000 strike, which is expected to remain near-term support for the index, followed by 17,500 strike & 18,100 strike, with writing at 18,100 strike, then 18,000 strike.
The above Option data clearly indicated that the Nifty is expected to trade in the range of 18,000-18,300 levels in coming sessions.
“Indications are pointing towards a rangebound trend to continue in the Nifty and we expect stock-specific moves to keep the participants occupied, thanks to the scheduled expiry of December month derivatives contracts,” Ajit Mishra, VP – Technical Research at Religare Broking said.
Besides, he feels the broader indices are also showing some stability so participants can selectively look for buying opportunities.
On the broader markets front, the Nifty Midcap 100 index gained 0.13 percent and Smallcap 100 index fell 0.07 percent.
India VIX, which measures the expected volatility in the market, rose by 0.68 percent to the 15.40 level, up from the 15.29 level, but still within the range below the 16 mark, which experts feel is not a worry for the market.
The Bank Nifty opened lower at 42,734 and traded in the range of about 300 points. The banking index moved above the 43,000 mark but failed to sustain above the same and closed with 32 points loss at 42,828, forming a small-bodied bullish candle on the daily charts with a long upper shadow, indicating the selling pressure at higher levels.
“The Bank Nifty index witnessed buying momentum from the lower levels but failed to surpass the hurdle of 43,000 on a closing basis. The index options data indicates immediate resistance at 43,000 where the highest open interest is built up on the Call side,” Kunal Shah, Senior Technical Analyst at LKP Securities said.
The index lower-end support stood at 42,400 which would act as a cushion for the bulls, he observed.
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