Nifty50 opened in the positive territory and remained rangebound throughout the session, ending the day with 0.50 percent gains on March 10. Technology, metals, pharma, auto, select FMCG and private banks supported the market.
The index formed a small bearish candle on the daily charts as the closing was lower than opening levels. Experts expect the consolidation to continue till the Nifty decisively breaks on the upside above the 15,273 mark.
Considering narrow trading ranges, Mazhar Mohammad of Chartviewindia.in advised traders to refrain from creating long positions in the index unless Nifty registers a strong bullish candle body with a wide intraday trading range.
Nifty50 opened strong at 15,202.15 and hit a day's high of 15,218.45, but remained rangebound with a positive bias. The index closed at 15,174.80, up 76.40 points. The market will remain shut on Thursday on account of Mahashivratri.
"Nifty50 continued its listless mode of trading as it confined itself to a 118-point trading range. In fact, the last five trading sessions are inside narrow trading ranges with indecisive candle formations and the index appears to be carving out a new trading range between 15,270 – 14,900 levels," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia told Moneycontrol.
In the next trading session, if the index sustains above 15,218 levels for at least 30 minutes, the strength can get extended towards 15,273 levels, he said. However, unless Nifty closes above 15,273 levels, a trending move in upward direction should not be expected. Alternatively, if Nifty slips below 15,100 in the next session then intraday weakness shall be expected which can extend towards 15,000 levels, he added.
Based on the aforementioned levels, if a breakout on the upside happens, then the initial target can be a test of lifetime high present around 15,431 levels.
Similarly, on the downside, 14900 seems to be emerging as the critical short-term support and if the index falls below the same then it can trigger a short-term downswing with an initial target of 14,600 levels, he added.
India VIX fell by 7.79 percent from 22.49 to 20.74 levels. "Cool down in VIX below 21-20 zones is required for bullish grip and smoother move in the market," Chandan Taparia of Motilal Oswal said.
On the options front, maximum Put open interest was seen at 14,000 followed by 14,500 strike while maximum Call open interest was at 16,000 followed by 15,500 strike. Call writing was seen at 15,400 then 16,000 strike while Put writing was seen at 15,200 then 15,100 strike.
The above options data indicates a wider trading range for the Nifty between 14,800-15,500 levels and an immediate range of maybe 15,000 to 15,350 levels.
Bank Nifty opened gap up at 36,112.25 but moved in a consolidative manner throughout the day. The index settled the day with gains of 72.60 points at 35,938.30 and formed a Bearish candle on the daily scale.
"The index is forming higher highs - higher lows from the last three sessions. Banking stocks are lacking the continuation in the momentum and as a result, the index is facing resistance above 36,000. Now, it has to continue to hold above 35,750 to witness an up move towards 36,250 and 36,500, while on the downside support is seen at 35,500 then 35,250 levels," Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
On the stocks front, bullish setup was seen in Mindtree, Biocon, Eicher Motors, JSW Steel, REC, Cummins India, Balkrishna Industries, Lupin, Hindalco, Sun Pharma, Bajaj Finance, Tech Mahindra, Voltas, Axis Bank and Bajaj Auto while weakness was seen in ONGC, Container Corporation, Petronet LNG, IOC, ITC and Indraprastha Gas, he added.
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