Technical View: Nifty reclaims 19,000 but is on a slippery slope

The Nifty Bank index erased previous session losses to end 1.2 percent higher at 42,782.

The Indian equity benchmarks snapped a six-day losing streak as the Nifty50 ended a percent higher on October 27, the first day of the November F&O series, supported by buying across sectors.

The index opened gap-up above 18,900 on positive Asian cues and extended the gains as the day progressed, regaining the 19,000 mark. It formed a long bearish candle on the weekly chart after losing 2.5 percent during the week.

"After relentless selling in recent days, the Nifty has temporarily paused its decline due to an oversold chart setup. However, the index closed significantly below the critical breakdown level of 19,250. As long as it stays below 19,250, the market may continue to be inclined towards selling on any upward movements," said Rupak De, Senior Technical Analyst at LKP Securities.

On the downside, weakness will resume if the index falls below 18,800. "This is because put writers are likely to defend the Nifty with substantial positions at 18,800, with immediate support placed at 19,000," he added.

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Bank Nifty

The Nifty Bank index started the new series 0.6 percent higher and extended the gains as the day went by. It erased the previous session's losses to end 1.2 percent higher at 42,782.

"For Bank Nifty, 42,400-42,300 would act as sacrosanct support zones above which, it can rally till the 200-day SMA (simple moving average) or 43,200 and 43,350 levels. On the flip side, below 42,300, the uptrend would be vulnerable," said Amol Athawale, Vice President-Technical Research, Kotak Securities.

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