The Nifty50 turned lower after a positive start and extended losses in the afternoon to close 0.59 percent lower on February 18, dented by weak global cues, rising US bond yields and an increase in coronavirus cases in some parts of the country.
The Nifty50 opened higher at 15,238.70 and hit an intraday high of 15,250.75 but after a couple of hours, it wiped out all the gains to touch the day's low of 15,078.05 in the afternoon. Though it made some recovery in the late trade, it ended 89.90 points lower to close at 15,119.
The index formed a bearish candle for the third day, as the closing was lower than the opening level. Experts expect selling pressure to extend if the index decisively breaks the crucial support of 15,000.
Intraday traders can initiate short below 15,078 and look for a modest target of 14,980, whereas positional shorting opportunity shall arise for bigger targets on a close below 15,000, Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in told Moneycontrol.
"The selling shall get further accentuated if the bears manage to push the index below 15,000 levels on a closing basis. In that scenario, initial support is placed around 14,600 levels. Interestingly, this support is also co-inciding with the post-Budget day bullish gap zone of 14,469–14,336 levels," Mohammad said.
In case a corrective downswing unfolds, realistic targets should be somewhere in the 14,600–14,300 zone, he said.
If the Nifty sustains above 15,000, it should remain rangebound between 15,000-15,400 levels, Mohammad said. "In this regard, strength should be expected if the Nifty manages a close above 15,250."
India VIX was marginally up by 0.20 percent from 21.50 to 21.54. The options data suggested that an immediate trading range for the Nifty50 could be between 14,800 and 15,300 levels.
On the options front, maximum Put open interest was seen at 14,000 followed by 15,000 strike, while maximum Call open interest was at 16,000 followed by 15,500 strike. Put writing was seen at 15,100 and 15,000 strikes while Call writing was seen 16,000 then 15,300 strike.
The Bank Nifty opened positive at 37,088.75 but failed to hold above 37,000 mark and drifted lower to hit the day's low of 36,367.45. The rate-sensitive index widened losses as underperformance continued.
The index settled the day with losses of 323.90 points at 36,587 and formed a bearish candle on the daily scale.
"The Bank Nifty continues its formation of lower highs-lower lows of the last two sessions. Now, it has to cross and hold above 36,500 levels to witness an upmove towards 37,000 then 37,350, while on the downside support is seen at 36,250 and 36,000," Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
On the stock front, a bullish setup was seen in Bank of Baroda, ONGC, Torrent Power, L&T Finance Holdings, BPCL, HPCL, NTPC, Coal India, Tech Mahindra, Container Corporation, LIC Housing Finance, Hindalco and Bharat Electronics. Weakness was seen in DLF, Apollo Tyres, Bajaj Finance, M&M, Balkrishna Industries, Nestle India, HDFC Bank, Titan Company, Colgate Palmolive and United Breweries, he added.