Nifty50 remained volatile throughout the trading session to finally settle with moderate losses on April 23. It formed a Doji kind on the daily charts.
The index also formed a Doji pattern on the weekly scale. It was down 1.9 percent for the week but the closing was near its opening levels. A Doji candle indicates there is some indecisiveness among the bulls and the bears and bounces were being sold in the absence of follow-up buying interest.
Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia advised traders to remain neutral on the index and look for stock-specific opportunities.
Nifty50 after opening lower at 14,326.35 hit an intraday high of 14,461.15 and an intraday low of 14,273.30. The index finally settled at 14,341.40, down 64.80 points.
"Nifty50 remained volatile throughout the trading session before signing off the day with a Doji formation both on daily as well as weekly charts. Interestingly 14,300 level is acting as some sort of glue for bulls on a closing basis as all intraday dips below 14,300 were bought into by the bulls only to push back the prices above the said level by the end of the day," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia told Moneycontrol.
"Moreover, 62 percent retracement of entire last leg of the rally. from the lows of 13,596 to a high of 15,431 is placed around 14,296. Besides, the 20-week exponential moving average is around 14,229 levels whereas 100-day EMA is around 14,172. All these points may be acting as a confluence of support zone between 14,300 – 14,150," he said.
Hence, as of now dip into this zone can be an opportunity to play for a trading bounce with an initial target of 14,526. Contrary to this, if the index closes below 14,170, it will lead to huge selling with an initial downside target of 13,950. In that scenario a bigger target towards 13,500 can't be ruled out, he added
India VIX fell by 1.43 percent from 23.02 to 22.69 levels. Option data indicated that the Nifty could see a wider trading range of 14,000 to 14,700 levels for coming sessions.
On option front, maximum Put open interest was seen at 14,000 followed by 13,500 strike while maximum Call open interest was seen at 15,000 followed by 14,500 strike. Call writing was seen at 15,000 then 14,800 strike while Put writing was seen at 14,000 and 14,200 strike.
Bank Nifty opened negative at 31,490.60 but managed to move in the positive territory and headed higher to hit a day's high of 32,148.40. However, it failed to hold the higher zones and concluded the day with losses of 60.30 points at 31,722.30.
The index formed a bullish candle on the daily and weekly scale with the major weekly support of 30,500 levels. "Now, Bank Nifty has to continue to trade above 31,700 for an upmove towards 32,250 and 32,500 while on the downside support can be seen at 31,250 and 31,000 levels," said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
On stocks front, bullish setup was seen in ICICI Prudential, Shriram Transport Finance, Cadila Healthcare, Muthoot Finance, NTPC, Power Grid, Lupin, Mahanagar Gas, Motherson Sumi Systems, Cholamandalam Investment, SRF and BPCL while weakness was seen in Escorts, Britannia Industries, GAIL, M&M, Zee Entertainment, HUL, Tech Mahindra, Titan Company and Infosys, he added.