The Nifty ended a tad lower after a volatile session on January 11, as traders turned cautious a day ahead of the release of CPI inflation data for December.
The index opened flat but remained volatile, swinging between the day’s low of 17,824 and high of 17,976. It ended the session 18.5 points down at 17,896.
The index formed a small-bodied bearish candle on the daily charts, which resembled a high-wave pattern. Going ahead, 18,000 is expected to be a crucial level. If the index reclaims 18,000 and stays above it, it can climb to 18,200-18,300, with support at 17,800, experts said.
Auto, FMCG, pharma and oil & gas stocks were under pressure, while banking & financial services, technology and metal stocks supported the market.
“Currently the market is witnessing non-directional activity and perhaps traders are waiting for either side breakout,” Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities said.
He expects the index to rally towards 18,100-18,150 once it goes past 18,000 but if the Nifty slips below 17,800, it can slide further to 17,700-17,675.
On the options front, the maximum Call open interest was at 18,000, which is expected to be the near-term resistance followed by 18,100 and 18,200 strikes, with Call writing at 17,900 strike and then 18,100-18,400 strikes.
On the Put side, the maximum open interest was at 17,800 strike, which is likely to be crucial support for the market, followed by 17,900 strike and 17,700 strike, with writing at 17,800 strike and then 17,900 strike.
The data indicates that the Nifty will trade in the 17,700- 18,200 range in the coming sessions.
India VIX, the fear index, fell half a percent to 15.44 level.
Banking index
Bank Nifty outperformed the benchmark indices. It opened moderately higher at 42,072 but hit an intraday low of 41,729. After an initial hour of volatility, it bounced back to hit the day’s high of 42,318. The index closed 218 points higher at 42,233.
The index formed a bullish candle which resembled a hammer pattern on the daily charts, indicating a potential reversal in the index.
“The Bank Nifty index witnessed a volatile trading session but managed to hold the immediate support level of 42,000. The index found support on the lower end at 41,700, where strong buying was visible,” Kunal Shah, Senior Technical Analyst at LKP Securities said.
The index will likely remain volatile in the coming session and a break below 41,700 will accelerate the move on the downside, he said.
The upper end of the intermediate resistance zone is expected at 42,350-42,400, and the short covering is expected towards 42,700, Shah said.
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