The Nifty50 failed to sustain around the 20-day simple moving average (15,870) in an initial hour of trade and remained volatile for the rest of the session before closing with moderate losses on June 30, the monthly expiry day for June futures & options contracts.
Overall, it was yet another session of volatility for the index which moved in a range of 15,700-15,900 for the fourth consecutive session and formed a Doji kind of candlestick pattern on the daily charts. Hence, the index needs to break this range on either side for firm direction, experts said.
The volatility cooled down a bit to 21.84 levels, down by 0.27 percent, but still above the crucial 20 mark which can favour bears and create discomfort for bulls going ahead.
The selling pressure extended in broader space as well. The Nifty Midcap 100 index fell 0.8 percent and Smallcap 100 index declined half a percent.
After opening flat at 15,774, the Nifty50 hit an intraday high of 15,890 in the morning and a low of 15,729 in late trade before closing with a 19 points loss at 15,780.
"The last four sessions of price action appear to be that of consolidation inside the range of 15,900 and 15,700 levels. Hence, a directional move is unlikely to emerge unless the index comes out of this range," Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia said.
The market expert feels if the index registers a close above 15,927 levels, then the strength can be expected to continue up to 16,200 levels, whereas if it closes below 15,687 then it can weaken the index with an initial target of 15,400 levels.
Therefore, he advised traders to wait for a breach of key consolidation levels and initiate the trade in the direction of a breakout.
Since it’s the beginning of the new series, Option data is scattered at various far strikes. We have seen a maximum Call open interest at 17,000 strike followed by 16,500 strike while maximum Put open interest was at 15,000 strike followed by 15,500 strike.
We have seen a marginal Call writing at 16,000 strike then 16,500 strike while Put writing was seen at 15,500 strike then 15700 strike. This Option data indicated that the Nifty could trade in a broader range of 15,300 to 16,300 levels in coming sessions.
Bank Nifty opened negative at 33,181 but managed to hold those opening levels and remained positive to rangebound for the most part of the day. The index closed with 155 points gains at 33,425 and outperformed broader space, forming a bullish candle on the daily charts.
"Now, the banking index has to hold above 33,333 levels to make an up move towards 33,750 and 34,000 levels, whereas supports are placed at 33,000 and 32,750 levels," Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
Among F&O stocks on the expiry day, the expert said the positive setup was seen in TVS Motor, HDFC AMC, NTPC, REC, Cummins India, Reliance Industries, Ashok Leyland, Shriram Transport Finance, PVR, L&T, and ITC.
However, weakness was seen in Indiabulls Housing Finance, IRCTC, IndiaMART InterMESH, RBL Bank, Strides Pharma Science, NALCO, Coforge, Indian Energy Exchange, L&T Infotech, Vedanta, Container Corporation, Mindtree, Bandhan Bank, Tata Consumer Products, Bajaj Finserv, Canara Bank, L&T Finance Holdings, Deepak Nitrite, BHEL, Tata Power, Indraprastha Gas, Dabur, Bajak Finance, IndusInd Bank and PNB, Taparia added.Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.