The Nifty50 remained volatile throughout the session and closed on a flat note on February 10 as selling in banks weighed on sentiment. Auto, select IT and pharma stocks supported the market.
The index formed a Doji kind of pattern on the daily charts, which experts feel indication of consolidation in the coming sessions. 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 of Chartviewindia feels traders with a high-risk appetite can remain short if Nifty trades below 14,977 levels for at least 30 minutes and look for bigger targets by placing a stop loss above 15,000 levels on a closing basis.
The Nifty50 opened higher at 15,119.05 and hit an intraday high of 15,168.25 in early trade, but remained volatile in the rest of the session to hit a day's low of 14,977.20. The index, finally, settled at 15,106.50, down 2.80 points.
"Nifty50 registered a Doji kind of indecisive formation as the market remained volatile and appears to have bounced back after testing 5-day exponential moving average with an intraday low of 14,977 levels. Moreover, close observation reveals that for the last three trading sessions, Nifty is making a round top kind of bearish formation with similar closes around 15,110 levels which is a cause for concern," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in told Moneycontrol.
He feels the strength in Nifty shall not be expected unless it registers a strong close above 15,110 levels. Therefore, in the next trading session if Nifty slips below 14,977 levels then the likelihood of weakness extending towards 14,700 levels shall remain higher, according to him.
"As our twin momentum oscillators slipped into sell zone, we expected Nifty to remain sideways with negative bias in next couple of trading sessions," he said.
India VIX fell by 1.31 percent from 24.27 to 23.95 levels. The options data indicated that the Nifty could see an immediate range of 14,800 to 15,300 levels for coming sessions.
On the option front, maximum Put open interest was seen at 14,000 followed by 13,500 strike while maximum Call open interest was at 16,000 followed by 15,500 strike. Put writing was seen at 14,300 and 14,100 strikes while Call writing was visible at 16,000 and 15,900 strike.
Bank Nifty opened flattish at 36,042.35 and moved sideways during the day. The banking stocks are now at a halt and as a result, the rate sensitive index sunk towards key support of 35,500 levels.
The index settled the day with losses of 273.40 points at 35,783.10 and formed a bearish candle on the daily scale with a long lower wick.
"Bank Nifty has got in range between 35,500 to 36,600 levels from past few sessions. Now it has to hold above 35,500 to witness a move towards 36,000 and 36,500 while on the downside support is seen at 35,500 and 35,250 levels," Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
Nifty future closed on a positive note with gains of 0.34 percent at 15,157 levels. On the stocks' front, "bullish setup was seen in Motherson Sumi, Indiabulls Housing Finance, Muthoot Finance, Page Industries, MRF, Piramal Enterprises, Cipla, Cummins India, Apollo Tyres, Cholamandalam Investment, Bharat Forge, Titan Company and Grasim while weakness was seen in Eicher Motors, InterGlobe Aviation, Britannia and BPCL, Chandan Taparia said.