The Nifty50 closed at a fresh five-month low on March 14, continuing the downtrend for the fourth consecutive session as the global counterparts remained under pressure despite a plan to backstop Silicon Valley Bank depositors.
The index opened flat and climbed up to 17,225 but erased those gains in the initial hour of the trade itself. In the middle of trade, the index managed to recoup those losses but that also immediately failed and finally the index settled with 111 points loss at 17,043, the lowest closing level since October 13 last year. It has seen the formation of a bearish candlestick pattern on the daily charts.
The Nifty50 managed to defend the psychological 17,000 mark and currently seems to be looking oversold with momentum indicators RSI (relative strength index) at 33 levels. Also, there seems to be some kind of bullish divergence in the price and indicator with the Nifty making a lower low and RSI making a higher low between February 28 and March 14, indicating a possibility of a rebound in coming sessions, experts said.
All sectoral indices, barring pharma, closed in the red.
"The relentless selling has dragged the Nifty towards the psychological mark, which is likely to be seen as the last ray of hope for a reversal in the short run. Technically, the market has entered way below oversold territory, and any relief on the global front could accelerate momentum on the higher side," Osho Krishan, Senior Analyst - Technical & Derivative Research at Angel One said.
As far as levels are concerned, he believes 17,200 is an immediate resistance, followed by the sturdy hurdle of 200 SMA (17,444), placed around the 17,400–17,450 odd zone in the comparable period. On the downside, strong demand is expected near 17,000–16,900 odd levels, he said.
The bearish formation would only get discarded above the 200 SMA. Until then, one should remain cautious and closely track global and domestic developments, the market expert advised.
On the weekly option front, maximum Call open interest was seen at 17,500, followed by 17,700 and 17,400 strikes, with Call writing at 17,200 strike, followed by 17,100 strike and 17,000 strike.
On the Put side, the maximum Put open interest was seen at 17,000 strike, followed by 16,800 strike, with writing at 16,800 strike, and then 17,000 strike.
The above Option data indicated that the Nifty may see an immediate trading range of 16,800 to 17,300 levels.
The Bank Nifty opened on a flattish note and after an initial bounce up to 39,768, it gradually drifted lower to hit a day's low of 39,133 levels in the first half of the session. Later on, it remained volatile within a wider range of 400 points and ended in negative territory with losses of around 153 points at 39,411.
The index has formed a small-bodied bearish candle with long upper and lower shadows on the daily scale, indicating a tug-of-war between bulls and bears at key levels.
It is forming lower highs - lower lows on the daily scale for the past three sessions and closed near its crucial support of 39,400-39,500 levels. "Now till it holds below 39,750 levels, the weakness may be seen towards 39,000 and then 38,888 levels, while on the upside hurdle shifted lower to 40,000 and then 40,400 levels," Chandan Taparia, Vice President, Analyst-Derivatives at Motilal Oswal Financial Services said.
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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
