The Nifty remained range-bound and closed a tad lower on February 21, as most sectors, barring FMCG, ended in the red, with information technology and PSU banks emerging as the biggest losers.
After opening higher at 17,906, the index rose to the day’s high of 17,925 but slipped to a low of 17,800 in late trade. It ended the day 18 points lower at 17,827.
It formed a bearish candlestick on the daily charts, making lower highs, lower lows for the third consecutive session.
The Nifty has been taking support at 17,800 as well as the 20-day simple moving average (SMA) placed at 17,824. If these levels are broken, the index can fall to 17,700, while 17,900-18,000 is expected to be the resistance, experts said.
“The Nifty has formed a bearish candle on daily charts which is broadly negative for the market. As long as the index is trading below 17,900, the weak sentiment is likely to continue and below the same it could slip to 17,750-17,700,” Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities said.
A quick pullback is possible if the market trades above 17,900 and on further appreciation, it can move to 17,950-18,000.
On the monthly options front, the maximum Call open interest was at 18,000 strike followed by 18,100 strike, whereas maximum Put open interest was seen at 17,500 strike followed by 17,800 strike.
The minor Call writing was seen at 18,150 strike, then 17,950 strike while there was Put writing at 17,800 strike then 17,750 strike.
The data indicates that the Nifty may have a broader trading range of 17,650-18,100 in the coming sessions.
Volatility has been rising from the last four straight sessions but is still below the 20-day SMA (14.43) as well as the 50-day EMA (14.52). India VIX, the fear index, was up 4.67 percent at 14.01 levels.
Banking index
The Bank Nifty opened positive at 40,785 and traded in the 40,500-40,950 range and closed the session 28 points down at 40,674.
The index formed a small bearish candle on the daily scale and made lower highs, lower lows on the daily scale for a third successive session.
“Now till it holds below 41,000 levels, the weakness could be seen towards 40,500 then 40,250 area while on the upside hurdle is expected at 41,000 then 41,250 levels,” Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
The broader markets also closed lower. The Nifty midcap 100 and smallcap 100 indices were down 0.4 percent each as the breadth was in favour of bears.
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