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NEW DELHI: Friday's flash crash came as a bolt from the blue for traders on Dalal Street as the Nifty swung wildly by over 480 points during the day.
The NSE benchmark index took a mighty fall to 10,866 from its high of 11,346, resulting in a strong Bearish candle on the daily scale.
However, it recovered quickly by around 300 points from its panic lows, but the bears refused to loosen their tight grip on the market.
“At today’s low of 10,866, the Nifty not only retraced 62 per cent of the entire rally from the lows of 10,417 registered in May 2018, but almost tested 200-day moving average, which is placed around 10,750 levels.
Usually, corrections tend to end with this kind of classic panic and retracement levels.
It will be too early to conclude so,” said Mazhar Mohammad, Chief Strategist, Technical Research and Trading Advisory, Chartviewindia.in.
On the options front, maximum Put open interest (OI) was at 11,000 followed by 11,100 strike while maximum Call OI stood at 11,500 and 11,400 strikes.
“We had mentioned the importance of 11,550 being not breached.
For the Nifty to reclaim its bullish trend, it was very much necessary and below that, we continue to maintain sell on advances as a strategy.
That level is now placed at 11,300 and we expect the Nifty to continue its downtrend for lower targets of 10,600-10,700,” said Mustafa Nadeem, CEO, Epic Research.
According to experts, going forward, if the Nifty sustains above 11,025 levels for a couple of sessions, one can look for bottoming out process.
“Until the Nifty doesn’t cross and hold above 11,333 zones, overall weakness could remain intact for a decline towards 11,000 and lower zones,” said Chandan Taparia, Technical and Derivative Analyst at Motilal Oswal Securities.
