Option band signifies an immediate trading range in between 10,880 to 11,080 zones.
The Nifty after positive start traded in a range of 70 points for throughout the session and closed mildly lower on Thursday, forming a bearish candle on the daily charts.
The index remained below its psychological 11,000-mark and register bearish candle for the second consecutive session today. Not only frontline but also Nifty Midcap index ended lower for the second day in a row, losing 0.7 percent. In fact, all sectoral indices closed in the red except FMCG.
The current rangebound trade indicated that the market eagerly await more corporate earnings data to get direction on either side by breaking the range of 10,925-11,080 levels, experts said.
The 50-share NSE Nifty opened higher at 10,999.50 and hit an intraday high of 11,006.50, but immediately wiped out those gains to trade in a tight range of 70 points. The index touched day’s low of 10,935.45, before closing 23.40 points lower at 10,957.10.
“As suspected Nifty50 created a range between 11,080–10,925 levels as it registered a Bearish Candle in today’s session with an intraday low of 10,935 and bounced back as a mark of respect to the lower boundary of consolidation zone,”Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
Hence market may continue to remain choppy and rangebound for couple of days inside this 150 point zone before registering a fresh breakout in either of the directions, he said.
According to him, breach of the lower end i.e a close below 10,900 may drag down the indices by around 150 points below this range which shall result in test of its 50-day moving average whose value is placed around 10,750 kind of levels.
Contrary to this, upmove shall emerge on a close above 11,080, he said. “Hence, traders for time being are advised to remain neutral and initiate positions in the direction of the breakout once it occurs.”
India VIX moved down by 0.95 percent at 13.55 levels.
On the option front, maximum Put open interest (OI) was seen at 10,800 followed by 11,000 strike while maximum Call OI is at 11,000 followed by 11,100 strike. Call Writing was seen at 11,000 followed by 11,300 strike whereas Put Writing was seen at 10,900 followed by 11,000 strikes.
Option band signifies an immediate trading range in between 10,880 to 11,080 zones, experts said.
“Nifty index opened positive but failed to hold above 11,000 zones and corrected towards 10,935 zones. Index has recently given a breakout above 10,929 zones but is unable to hold it gains and supply is visible at higher levels. It has formed a Bearish Candle on daily chart but at the same time decline is also being bought in the market,” Chandan Taparia, Associate Vice President | Analyst-Derivatives, Motilal Oswal Securities told Moneycontrol.
Now if it manages to hold above 10,950 zones then only positive to rangebound move could be seen towards 11,000 then 11,080 zones while a hold below 10,929 could confirm a short term Double Top pattern for a potential decline towards 10,888 then 10,835 zones, he feels.
Bank Nifty opened Gap up but failed to hold above 27,000 zones and remained rangebound for the most part of the trading session.
Taparia said the index is finding hurdle near to 27,000 zones while major support exists near to 26,650 levels. “It has to continue to hold above 26,750 zones to witness an upmove towards 27,000 then 27,165 while on decline major support is seen at 26,650 then 26,400 and lower levels.
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