Stock Market

F O: Fall below 11,888 level may take Nifty to 11,800-11,700 zone

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By Chandan TapariaNSE Nifty opened with a marginal gain, but started correcting from initial trades and continued to make lower lows as the session progressed.

The index breached its crucial support of 11,950 and formed a big red body candle on the daily chart. Dalal Street witnessed breakdown from Head and Shoulder pattern on the hourly chart, which doesn’t bode well for the bulls.

On the weekly scale, Nifty formed a Bearish Engulfing pattern and a sustainable move below 11,888 may lead to a correction towards 11,800 and then 11,700.

On the flipside, immediate hurdle is placed at 12,050 and 12,100 levels. On the monthly options front, maximum Put open interest was at 12,000 followed by 11,500 strike, while maximum Call OI was at 12,000 followed by 12,500 strike.

We have seen Call writing at 12,000 followed by 12,100 strike while Put writing was seen at 11,500 followed by 11,800 strike.

Option data suggests a shift in lower trading range between 11,700 and 12,100. India VIX fell down by 4.62 per cent to 13.64 level. In line with the broader market, Bank Nifty corrected sharply and continued to make lower lows throughout the session.

The bank index formed a bearish candle on the daily chart.

We witnessed a Dark Cloud Cover pattern on the weekly scale.

In the week gone by, it failed to cross penultimate week’s high and breached its crucial support of 31,500 to confirm a Double Top pattern on the hourly chart.

Now, till Bank Nifty remains below 31,500–31,600, we may see a corrective move towards its next support for Bank Nifty is at 31,000 and 30,800. Nifty futures fell 0.82 per cent to 11,949 Builtup of long positions were seen in Bharti Infratel, Kotak Mahindra Bank and Berger Paints while shorts were seen in Dish TV, RBL Bank, NCC, PFC and LIC Housing Finance. (Chandan Taparia is Technical - Derivative Analyst at MOFSL.

Investors are advised to consult financial advisers before taking an investment calls based on these observations)




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Category: Stock Market


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