Technical View: Nifty forms bearish candle; close below 11,896 confirms weakness

The market ended November 21 marginally lower, squandering a positive start as selling pressure during the day didn't allow the bulls to take charge of Dalal Street.

The Nifty closed at 11,968.40, with a loss of 31 points or 0.26 percent. It formed a bearish candle after the Doji formation of a day earlier, failing to hold above 12,000-mark.

The repeated inability of the market to sustain above 12k level may be hinting at an impending weakness, which will be confirmed on a close below 11,896 levels, experts say.

"A strong close above 12,038 shall negate the current bearish view by extending the strength towards 12,103 levels," said Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in.

"For the time being, traders are advised to remain neutral long side, where fresh shorting can be considered below 11,896 levels on closing basis," he added.

India VIX fell by 1.22% at 14.97 levels. Now, VIX needs to continue to hold below 15 zones to surpass the recent highs.

Maximum Put open interest is at 11,900 followed by 11,800 strike, while maximum Call OI is at 12,000 followed by 12,200 strike.

Some Put writing was seen at 12,000 and 11,900 strikes; while Call writing was visible in 12,000-12,200 strikes. The options data suggests a broader trading range between 11,800 and 12,200.

The Bank Nifty continued to hold above 31,200 levels for the second consecutive session and formed a small red-bodied candle on the daily scale. It is making higher lows for the fifth consecutive session and ended the session on a flat note.

"Till it holds above 31,200 levels, we may see an extension in ongoing optimism towards 31,500 then 31750 levels; while downside supports are placed at 31000 then 30800 zones," said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services, said.