On the downside, strong support is placed near 10,000 levels. As long as index trades below 200-DEMA, and 10,000 levels the trend is likely to favour bears, suggest experts.
The Nifty50 ended the March series on a weak note, down 2.6 percent on the last trading day on the week. The index closed below its crucial 200-days exponential moving average (DEMA) and formed a small bearish candle on the daily candlestick charts.
The Nifty future closed the March series with the loss of 2.6 percent. It closed lower by 200 points from its VWAP. The Nifty Future has seen rollover of around 66% on provisional basis compare to 62.34 percent rollover seen in the last series.
In terms of technicals, the index formed a bearish candle after a Doji pattern which does not auger good news for the bulls in April series. For the bulls to gain upper hand, Nifty has to surpass its crucial resistance level placed at 10,200, followed by 10,400 and 10,500.
On the downside, strong support is placed near 10,000 levels. As long as index trades below 200-DEMA, and 10,000 levels the trend is likely to favour bears, suggest experts.
The index which opened at 10,143.60 rose to an intraday high of 10,158.35. It slipped below 10,100 levels to hit an intraday low of 10,096 to close the day at 10,113 down 70 points on Wednesday.
“It is a weak close on the Indian bourses as Nifty50 registered a small bearish candle formation, as a follow up to Tuesday’s Doji, as if it is confirming the short term weakness going forward. However, if this fall is just for expiry related reasons then bulls should come back on the first day of the new series,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“But, if in next couple of trading sessions Nifty50 breaches the level of 10002 then recent lows of 9,951 will be challenged which may then open up new targets towards 9700 levels. Last two sessions price behaviour has clearly reviewed the chances of bears once again,” he said.
Mohammad further added that as long as Nifty50 sustains below 10227 levels the near term trend shall continue to favour bears. Hence, traders are advised to avoid long positions for time being.
On the options front, for the April series data is scattered at various strike prices since it’s the beginning of new series.
Fresh Put writing at 10,000 followed by 9,800 strikes while Call writing is seen at 10,400 then 10,600 strikes. “Options data suggests immediate support at 10000 and if that is not respected then index could slip towards 9850-9800 zones while the upside is capped to 10,300 zones,” Chandan Taparia, Derivatives, and Technical Analyst at Motilal Oswal Securities told Moneycontrol.
“The Nifty formed a Bearish candle on the daily scale followed by a Doji which indicates that selling pressure is being witnessed at higher levels,” he said.
Taparia further added that on the weekly scale, index formed an inside bar or a Harami Candle which indicates that bulls are not ready to get out even after its major downtrend. Now if it sustains below 10,141 zones then it may start the fresh decline which could push it towards 10,050 then 9,950 zones while on the upside hurdles are seen at 10,222 and 10,276 marks.
