The Nifty50 extended losses for yet another trading session on February 13 as traders may be cautious ahead of CPI inflation data due later in the day. Weak Asian cues also weighed on sentiment.
The index opened flat at 17,859 and climbed up to 17,881 in initial trades but failed to hold on to those gains and traded in negative terrain for the rest of the session to hit a day’s low of 17,720. It finally settled at 17,771, down 86 points and formed a bearish candle on the daily charts, with a long lower shadow indicating a bit of buying on declines.
The Nifty has crucial support at 17,650 followed by 17,500 levels and as long as these levels are held the index may continue to be rangebond with resistance at 17,900. The decisive close on either side can give firm direction to the market, experts said.
Most of sectors participated in the downtrend with IT, PSU Bank and Metal correcting the most.
“The trend looks sideways to negative for the near term as the headline index failed to provide an upside breakout. On the lower end, crucial support is visible at 17,650, below which the Nifty may witness a significant correction,” Rupak De, Senior Technical Analyst at LKP Securities said.
On Option front, we have seen weekly maximum Call open interest at 18,000 strike followed by 17,800 strike, with meaningful Call writing at 17,800 strike then 18,000 & 17,900 strikes.
On the Put side, the maximum open interest was seen at 17,800 strike followed by 17,500 strike, with Put writing at 17,500 strike then 17,400 and 17,700 strikes.
The above Option data indicated that the immediate trading range for the Nifty50 could be 17,650-17,950 levels.
India VIX moved up by 7.33 percent from 12.75 to 13.68 levels. Volatility negated its lower highs formation of the last seven trading sessions and now needs to cool down for market stability to resume, experts said.
Bank Nifty opened on a flattish note at 41,563 and after an initial tick towards 41,662, it drifted lower hitting a day’s low of 41,158 in the first half of the session. Later it got stuck in the 41,200-41,400 area and ended with losses of 277 points at 41,282.
The banking index has formed a bearish candle on the daily scale as selling pressure was seen at higher zones and it traded in negative territory for the most part of the session. “Index got stuck between 41,100 and 41,750 zone from the past six sessions and now it has to hold above 41,250 for an up move towards 41,750 and 42,000 levels, while a hold below the same could see some weakness towards 41,000 and then 40,750 levels,” Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
The broader markets hit hard compared to benchmarks as the Nifty Midcap 100 and Smallcap 100 indices declined 1.5 percent each on weak breadth.
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