On option front, maximum Put OI was seen at 11000 followed by 11,200 strike while maximum Call OI was at 11,500 followed by 11,600 strike.
Finally bears managed to take control at Dalal Street as the Nifty50 snapped five-day winning streak on Friday. The index after opening lower remained in the negative territory throughout the session, forming bearish candle on the daily charts and Spinning Top pattern on the weekly scale.
The index continued to gain for third consecutive week, rising 0.6 percent taking total three-week gain to 3.8 percent.
The 30-share BSE Sensex lost 155.14 points to 37,869.23 and the Nifty Midcap index also participated in the fall, shedding half a percent while the sectoral trend was mixed.
The Nifty50 after opening lower at 11,474.95 extended losses as the day progressed and hit an intraday low of 11,419.65, dragged by banking & financials and metals. The index closed 41.20 points lower at 11,429.50.
Experts expect the market to consolidate for a while before moving up further and crossing 11,500 levels. But if the index breaks 11,400-mark then it can see some more selling pressure, experts said.
"In-line with our projections Nifty50 appears to have registered a short term top around 11,500 levels as it registered a bearish candle to sign off the last session of the week and on weekly charts candlestick pattern resembles an indecisive Spinning Top suggesting market participants are clueless at higher levels," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
He said on the downsides critical support on short term charts appears to be placed around 11,373 levels breach of which shall not only confirm a short term top around 11,500 levels but also has the potentiality to extend this downswing towards 11,230 kind of levels.
Unless Nifty50 registers a fresh breakout above 11,500 levels the index shall not resume a fresh leg of upswing, he feels.
"Nifty is falling towards the junction of 40-hour exponential moving average & hourly lower Bollinger Band, where a rising trendline is also nearby. Thus, 11,410-11,400 shall be the immediate support zone to watch out for," Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan said.
He feels though the overall trend continues to be positive, the index can get into a consolidation mode before stretching higher. "So the setup looks apt to take the profit off the table & be on the sideline."
India VIX moved up by 1.36 percent at 12.85.
On the option front, maximum Put OI was seen at 11000 followed by 11,200 strike while maximum Call OI was at 11,500 followed by 11,600 strike. Call writing was seen at 11,500 strike whereas marginal Put Unwinding was seen at immediate strikes.
"The Nifty negated higher top–higher bottom formation and corrected towards 11,420 levels. It formed a Bearish Belt Hold candle on a daily chart and a Spinning Top on a weekly scale which implies that follow up buying is missing at higher levels," Chandan Taparia, Associate Vice President | Analyst-Derivatives, Motilal Oswal Securities told Moneycontrol.Now the index has to continue to hold above 11,435 zones to extend its move towards 11,500 zones while a hold below 11,350 could change the immediate trend for a decline towards 11,300-11,250 zones, he said.
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