The Nifty ended lower for the sixth consecutive session on May 13, erasing the intraday gains amid selling led by the metal and banking names in the final hour of the trade.
Amid mixed global cues, the Nifty opened higher at 15,977, crossed 16,000 intraday but settled at 15782.20, down 25.80 points, or 0.16 percent, from the previous close, forming a bearish candle on the daily as well as the weekly frame.
"The way Nifty has given up around 300 points from the intraday high of 16,083 is hinting at a lack of conviction on the part of bulls about the sustainability of the upmove at higher levels," Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in, said.
"Going forward, it remains critical for the index to sustain above 15,735, as a breach of this can eventually drag down the index towards 15400 levels, where some support is visible."
On the upside, strength should not be expected unless the index closes above 16,000 for a couple of sessions. For the time, it would be prudent for market participants to confine themselves to the fences, he said.
On the options front, Maximum Call OI is at 17,000 then 16000 strike, while Maximum Put OI is at 16000 then 15500 strike.
Marginal Call writing is seen at 16100 then 16300 strike, while Put writing is seen at 16000 then 15800 strike.
The options data suggests a wider trading range between 15,500 and 16,300 due to higher volatility.
India VIX was up by 4.98 percent from 24.26 to 23.05. Volatility cooled slightly but is still high, which smoothened the bear grip.
"The market shall remain uncertain unless VIX cools off," Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services, said.
The banking index
The Bank Nifty opened around 400 points higher and remained in a consolidative mode. Like the Nifty, it sank lower in the last hour of the day to breach its previous day’s low.
It formed a Bearish candle on the daily frame and closed 410 points down.
On the weekly frame, it formed a Bearish candle and made lower highs for the fifth week.
"Till it holds below 33,333 zones, it may see weakness towards 32,750 and 32,500, whereas hurdles shift lower to 33,500 and 34,000 zones," Taparia said.Disclaimer: The views and investment tips expressed by 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.