Representative image.
The Nifty lost momentum and extended the downtrend for the second consecutive session on January 20 despite some positive global trends. Selling in FMCG, metal, pharma, auto and select technology stocks weighed down the index.
After opening higher, the index hit the day’s high of 18,145 but squandered the gains in the afternoon to slip to 18,016. The index closed 80 points, or 0.44 percent, down at 18,028. For the week, the index was down 0.4 percent.
The index formed a bearish candle on the daily charts with lower high, lower low formation for the second straight session, indicating nervousness among participants. It closed below 50-day exponential moving average (at around 18,100) and also broke the small support trend line adjoining January 13 and January 17, 2023.
On the weekly scale, the index has formed a long-legged Doji pattern for yet another week, with a higher high and higher low formation, indicating indecisiveness among buyers and sellers about the future market trend.
Experts expect range-bound trade to continue in the coming, with crucial support at around at 17,800 and resistance at 18,200 as traders wait for the Budget 2023 to be presented on February 1.
” The sentiment remains indecisive as the Nifty forms a back-to-back Doji pattern on the weekly chart,” Rupak De, Senior Technical Analyst, LKP Securities, said.
On the lower end, support is intact at 17,750, resistance on the higher end is pegged at 18,300. Breakout on either will confirm the directional trend, he said.
On the Options front, the maximum Call open interest was at 18,100 strike followed by 18,200 strike, with meaningful Call writing at 18,100 strike then 18,200 strike.
On the Put side, the maximum open interest was at 18,100 strike followed by 18,000 and 17,800 strikes, with writing at 18,100 strike then 17800 strike.
The data indicates that the Nifty will trade in the 17,900 to 18,200 range in the coming sessions.
The volatility index India VIX fell 1.23 percent from 13.96 to 13.79 levels.
Banking index
The Bank Nifty opened higher at 42,516 and outperformed the Nifty but moved in a consolidative manner throughout the session with some pressure at higher zones. It moved in a range of 350 points and closed 178 points higher at 42,507.
The banking index formed a Doji candle on the daily scale and formed a hammer pattern on the weekly scale, indicating some support-based buying at the lower zone.
“The index has to hold above 42,350 level to make an up move towards 42,750 and 43,000 levels, whereas supports are placed at 42,222 then 42,000 levels,” Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services, said.
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