Technical View | Nifty forms bullish candle, experts say intraday traders can sell below 11,250

Nifty50 recouped intraday losses in afternoon trade but remained marginally lower at close on September 9 following weakness in Asian peers and setback to one of vaccine trials. Traders closely watch India-China border tensions.

The index closed below 11,300 mark, but formed bullish candle on the daily charts as closing was lower than opening levels.

Experts feel the selling pressure can be seen if the index breaks 11,190 levels in coming sessions, but till then rangebound trade is expected to continue.

For next session, it looks prudent on the part of short-term traders to remain on sidelines whereas intraday traders can consider shorting below 11,250 levels for a modest target of 11,190, Mazhar Mohammad of Chartviewindia.in advised.

The Nifty50 opened lower at 11,218.60 and hit an intraday low of 11,185.15, but managed to recoup some of losses to touch a day's high of 11,298.15. The index finally ended at 11,278, down 39.40 points.

"In-line with the bearish sentiment prevailing in global markets Nifty50 opened with a steep gap down but bears failed to capitalise on that further which resulted in a eventual recovery of almost all the intraday losses. This kind of behaviour ahead of weekly expiry is pointing towards some sort of stability in next session and can pave the way for short covering in next session," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in told Moneycontrol.

If the index sustains above 11,300 levels, then it can be expected to rally towards the zone of 11,350 - 11,380 levels, he feels.

Contrary to this if the index faces resistance above 11,300 and fails to sustain above that level then it shall remain sideways with negative bias, according to him.

In case if the index breaches 11,185 levels then selling shall be resumed with target of 11,060 levels, he said.

India VIX fell by 0.74 percent to 22.55 levels. Option data suggested that an immediate trading range for the Nifty remained 11,100 to 11,500 levels for coming sessions.

On option front, maximum Put open interest was at 11,000 followed by 10,500 strike, while maximum Call open interest was at 11,500 followed by 12,000 strike. Marginal Call writing was seen at 11,500 then 11,300 strike while Put unwinding was seen at all the immediate strikes.

Bank Nifty opened gap down at 22,486.70 and drifted sharply lower to hit a day's low of 22,080.40. The index continued to underperform Nifty50 and fell 477.40 points or 2.10 percent to close at 22,267, forming bearish candle on the daily charts.

"It has been making lower highs - lower lows on daily scale and overall trend is under pressure. Now it needs to hold above 22,500 levels to witness some stability, however if the index holds below the same then it could drag rate sensitive index towards 22,000 then 21,750," Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.

Positive setup was seen in Tata Steel, Zee Entertainment, Cipla, Reliance Industries, Escorts, Dr Reddy's Labs and Grasim while weak structure was seen in RBL Bank, SBI, Axis Bank, Bajaj Finance, IOC, Gail and Shriram Transport etc., he added.