Technical View | Nifty extends losses for the third day, 17,500 is the level to watch

Market

The Nifty closed lower for a third consecutive session on April 19, dragged down by technology, bank and FMCG stocks.

The index, which opened flat at 17,653 and remained rangebound, ended the day at 17,619, down 41 points. It formed a bearish candlestick on the daily timeframe, making lower highs for the second day.

It not only defended the crucial support of 17,600 but also the long downward-sloping resistance trendline adjoining the record high (December 2022) and February swing high.

The Nifty’s daily trading range has been narrowing. As long as the index holds 17,600-17,500 area, which coincides with 200-day SMA as well as 200-day EMA, the possibility of rebound is high. It can take the Nifty back to 17,800-17,900, experts said.

"The high low range of the market is getting narrower in the last three sessions and the Nifty is placed firmly at the crucial support of previous upside broken trendline resistance at 17,600 levels," Nagaraj Shetti, Technical Research Analyst at HDFC Securities said.

The short-term trend continues to be choppy and is expected to continue for the next session, he said. The market is likely to find support around 17,600-17,500 before showing an upside bounce from the lows, he said.

As per the options data, 17,700, and 17,800 saw the maximum open interest on the Call side, which can act as a crucial resistance area for the Nifty. Meaningful Call writing was seen at 17,600, 17,700 and 17,800 strikes.

On the put side, the highest open interest was at 17,500, 17,600 and 17,400 strikes, with writing at similar strikes, indicating crucial support levels for coming sessions.

"The 17,500 levels will act as a crucial support for the index and a decisive close below this will once again bring the trend back to sideways from an up-trend," Rahul Ghose, Founder & CEO, Hedged, said.

The Bank Nifty defended 42,000 and remained within the trading range for the second consecutive session. The index closed 111 points down at 42,154 and formed a bearish candlestick on the daily scale, with small upper and lower shadows, indicating a rangebound session.

The intraday low of 41,800 on April 17 is expected to act as a key support in the near term, experts said.

The maximum Call open interest was at 43,500 strike, followed by 42,500 and 42,300 strikes, with Call writing at 42,200 strike, then 43,500 and 42,300 strikes.

On the Put side, the maximum open interest was at 42,000 strike, which can be immediate support, followed by 41,500 and 41,000 strikes, with writing at 42,000 strike, then 41,900 strike.

The broader market closed in the red. The Nifty midcap 100 index snapped a seven-day winning streak and the smallcap 100 index squandered 11 days of gains to close a tenth of a percent each.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.