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By Chandan Taparia The Nifty50 index opened in the positive on Monday but witnessed selling pressure for the entire session.
It has been forming lower highs and lower lows for last five sessions.
The index formed a Bearish Candle on a daily chart, which indicated dominance by the bears.
As long as it holds below 10,550, Nifty50’s weakness could extend towards its next support at 10,440 and 10,400 levels, while on the upside, a hurdle is seen at 10,600 level.
On the options front, maximum Put open interest was at 10,500 followed by 10,600 while maximum Call OI was at 11,000 followed by 10,800.
There was meaningful call writing at 10,600 followed by 10,700, which restricted its upside momentum while Put writing was seen at 10,500 followed by 10,450, which could hold the market on declines.
Options data suggested an immediate trading range between 10,450 and 10,600 levels.
India VIX moved up 1.84 per cent to 14.41 levels.
Bank Nifty opened flat and remained in a broader range between 25,850 and 25,650 levels.
However, it formed a Bearish Candle on daily chart, indicating that the bears were getting a grip on the market.
Now, as long as it sustains below 25,900, Bank Nifty could see weakness till 25,500 and 25,250 levels, while on the upside, a hurdle is seen at 26,000 level.
Nifty futures closed in the negative with a loss of 0.52 per cent at 10,541.
Broadbased selling was witnessed across sectors, among which major shorts were seen in pharma and auto sectors.
(Chandan Taparia is Technical Derivative Analyst at Motilal Oswal Securities.
Investors are advised to consult financial advisers before taking an investment calls based on these observations)
