Mazhar Mohammad said in next trading session if Nifty fails to take support around its 100-day simple moving average (11,560) then fresh breakdown can be witnessed
Nifty extended selling pressure in late trade to end sharply lower on July 18, weighed by global weakness on trade worries and profit booking after a two-day rally.
The selling was across sectors that pulled the index below 11,600 and resulted in the formation of Bearish Belt Hold pattern on the daily scale.
A 'Bearish Belt Hold' pattern is formed when the opening price becomes the highest point of the trading day (intraday high) and the index declines throughout the trading day making up for the large body. The candle will either have a small or no upper shadow and a small lower shadow.
Experts feel overall the index has been rangebound for several weeks now but if it extends sell-off and breaks immediate support of 11,560, then chances of it falling below 11,500 can't be ruled out in coming sessions.
"Nifty50 appears to have resumed its downswing with a near term top in place around 11,700 as it registered a Bearish Belt Hold kind of formation before signing off the session which triggered sell signals on lower time frame charts," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
For time being, upsides shall remain capped around 11,700 and hence traders can make use of any bounce to create fresh short positions and look for the initial target of 11,510 in next session. Below that eventual index should head to make new swing lows in this corrective phase, he added.
On the option front, maximum Put open interest (OI) is at 11,300 followed by 11,6,00 strike while maximum Call OI is at 12,000 followed by 11,700 strike.
Put writing is at 11,550 and 11,450 strike while meaningful Call writing is at 11,700 followed by 11,650 strike. Option data suggests a trading range in between 11,500 to 11,800 zones.
India VIX fell by 1.12 percent to 11.66 levels.
Nifty Bank fell 304.90 points to close at 30,430.60 and formed a bearish candle on the daily chart."Good support for Nifty bank is coming near 30,200-30,000 and resistance is coming near 30,600-30,800," Rohit Singre, Senior Technical Analyst at LKP Securities said.The Great Diwali Discount!
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