The Indian benchmark indices closed with a negative sentiment on February 12. The Nifty opened sharply but plummeted on an intraday basis, closing at 21,616, down 166 points. The India VIX, known as the fear indicator, rose 3.98 percent intraday to 16.06, causing significant discomfort for the bulls.
On the other hand, Bank Nifty oscillated in a rangebound zone for the past three sessions and closed just below the crucial 200-period MA of the 44,900 level, weakening the bias and turning the sentiment slightly cautious.
The question arises that going forward where are the markets heading towards in the next few sessions? Check support and resistance levels:
According to Rajesh Bhosale, Technical Analyst at Angel One, "Although there wasn't a significant alteration in global cues, our markets faced downward pressure, particularly impacting recent top performers. The benchmark index also breached the critical 20EMA support level, previously holding firm over the past two sessions, suggesting potential further weakness in the short term. While Nifty remains range-bound with 21,500 serving as strong support, Monday's struggles in the broader markets indicate a likelihood of breaking these levels, potentially opening the path downwards towards 21,350 - 21,250 in the upcoming sessions."
Conversely, he highlights that resistance levels have shifted lower to around 21,800 - 21,850, having acted as barriers in the previous two sessions. He advises traders to reduce long positions during any price rebounds and to refrain from bottom fishing until clear signs of strength emerge.
"The index has an important support zone near the 21,500 level and thereafter, has the crucial and major support at the significant 50EMA zone of 21,300 levels. The support for the day is seen at 21,500, while the resistance is seen at 21,750," stated brokerage firm Prabhudas Lilladher.
Bank Nifty
According to Samco Securities from a derivative standpoint, Bank Nifty saw intense selling pressure on an intraday basis, closing at 44,882, down 752 points. All strikes from 45,000 to 46,000 saw put writers (bulls) exiting and call writing (bear entry). This led to a sharp intraday fall in Bank Nifty. "The call writers built significant short positions at the 45,000 strike in the index. The put writers held on the 44,500 strike in the index, and option activity at this strike will provide cues about future direction," it said.
"PSU banks bore the brunt, experiencing a significant 4.66 percent decline. None of the Nifty Bank constituents closed in the green, signifying intense selling across the sector. The Bank Nifty displayed a large red candle engulfing the entire previous day's body. The index slipped below the crucial 200 DMA after a considerable period. The combined weakness in PSU and private banking stocks could drag the index to levels 44,000-43,800, with a formidable resistance of around 45,600. Caution is advised, considering the possibility of a fake minor pullback leading to a further downturn," said Om Mehra, Technical Analyst at SAMCO Securities.
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