Stock Market

F O: Overall market trend under pressure; resistance levels drop

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By Chandan TapariaNifty opened with a gap down for yet another session on Friday in line with weak global cues and corrected nearly 450 points to close near the 11,200 mark.

It continued to make lower highs and lows for the fifth consecutive session and formed a Bearish Marubozu candle on the daily as well as weekly charts as selling pressure sustained for most part of the week. The index is down 7.3 per cent this week, as it witnessed one of the worst falls since October 2008.

The overall trend of the market is under pressure and resistance levels are gradually shifting lower.

As long as it holds below the 11,333–11,350 zone, Nifty could see further weakness towards 11,111 and then 11,000 levels, while on the upside hurdles are seen at 11,450 and then 11,550 levels. Since it is the beginning of a new series, options data lay scattered at various strike prices.

Maximum Call open interest stood at 12,000 and then 11,800 levels, while maximum Put OI was at 11,800 followed by 11,700 levels.

There was meaningful Call writing at 11,500 and then 11,300 levels, while Put writing was seen at 11,300 and then 10,800 levels. Options data lay scattered at nearby strike prices, not giving any sense for immediate range.

However volatility trading range could be seen between 10,800 and 11,600 levels. India VIX moved up sharply by 30.83% to 23.23 level.

India VIX has seen a breakout from its horizontal trend line on the daily scale, thus volatile swings could not be ruled out in the market. Bank Nifty opened with a gap down and witness sustained selling pressure throughout the session to close near the 29,100 mark.

It corrected more than 1,000 points and failed to hold Budget Day’s low and closed at a four-month low.

It continued to form lower highs and lows for past five sessions and formed a Bearish Marubozu Candle on the daily as well as weekly charts, which indicated complete dominance by the bears at higher levels. Resistance levels shifting lower gradually.

As long as it holds below 29,600 mark, weakness could take Nifty towards 28,750 and 28,500 levels, while on the upside, hurdles are seen at 29,750 and then 30,000 levels. Nifty futures closed with significant losses of 4.07 per cent at 11,158 level.

Most shorts were seen in HCL Tech, Vedanta, Hindalco, PFC, Dabur and Titan.

(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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