The Nifty50 opened strong on short covering, but last hour sell-off pushed index lower on March 27, ahead of expiry of March derivative contracts due on Thursday.
Along with weak global cues, index heavyweights Reliance Industries and HDFC Group stocks dragged market. The index closed a tad below 11,450 levels and formed bearish candle on the daily charts.
The Nifty50 opened sharply higher at 11,531.45 and hit a day's high of 11,546.20, but saw selling pressure in last hour of trade and hit an intraday low of 11,413. The index closed 38.30 points lower at 11,445.
"Nifty50 registered a bearish candle with a lower top, which appears to be a cause for concern. Failure to build on to the gains of gap-up opening is suggesting lack of conviction on the part of bulls at higher levels who has chosen to book profits by making use of strength," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in told Moneycontrol.
He said in next trading session if Nifty closes below 11,400 then selling pressure may get further accentuated in the new series.
As Nifty appears to be entering into high volatile phase it is advisable for traders not to initiate any fresh positions by making use of dip on expiry session, he added.
According to Mazhar Mohammad, strength on Nifty can be expected only on a close above 11,550 levels which shall then pave the way for test of life time highs placed around 11,760 levels.
India VIX moved up by 3.44 percent to 17.04 levels.
On Option front, maximum Put open interest (OI) is at 11,000 followed by 11,400 strike while maximum Call OI is at 11,600 followed by 11,500 strike.
Meaningful Call writing is at 11,600 followed by 11,550 strike while Put unwinding is at all immediate strike price with minor Put writing is at 11,350 strike.
Option band signifies a narrow trading range in between 11,400 to 11,550 zones, experts said.
"Nifty index has to hold above 11,400-11,420 zones to extend its gains towards 11,550 then 11,650 zones while on the downside support is seen at 11,350 to 11,333 zones," Chandan Taparia, Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited said.
Bank Nifty opened gap up and made an new life time of 30,262 mark but witnessed some profit booking at higher levels and drifted sharply towards 29,800 zones.
The index closed above psychological 30,000 levels for the first time, up 137.65 points at 30,019.80 and formed a Doji Candle on daily scale as it closed near its opening level but managed to hold above 29,888 zones.
"Now till it holds above 29,888 zone to extend its gains towards 30,250 then 30,500 zones while on the downside crucial support is seen at 29,500 zone," Chandan Taparia said.
First Published on Mar 27, 2019 04:50 pm
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