The global indices are hitting low day by day due to the already weak economies getting hit harder by COVID-19 and the expectation of recession is increasing. Today the benchmark Nifty opened 121.4 points gap up at 9088.45 but within a few minutes, it was dragged down by bears with continuous selling pressure throughout the trading session. The day had been volatile as estimated earlier with a bearish bias. Nifty closed at 8,468.80 losing 498.25 points at the end of the day making a big bearish Candle on the daily chart. On the weekly and monthly charts also, it made a bearish candle. The market still seems to be in the grip of bears.
The FIIs were net sellers with a turnover of 5085.35Cr while the DIIs were net buyers with a turnover of 3636.44Cr. Market breadth was negative with 6 stock advancing and 44 declining from the stack of nifty 50. The closing of Nifty at 8,468.80 is well below 200DEMA at 11,543 and the daily pivot at 9,095.48. The daily Stochastic is at 18 and RSI is at 15 indicating the market is still in the oversold zone. A small pullback towards 9,700 shall not surprise if Nifty maintains closing above 9,100 and gets some positive cues coupled with short covering.
Nifty’s new resistance levels are at 8,682, 8,852, 9,128 and 9,357 while the support levels are at 8,398, 8,288, 8,133, and 8,020. The fear gauge (India VIX) is all-time high at 63.95 with increased ATR of Nifty and BankNifty due to fear of uncertainty of the markets which is driving the indices volatile. The daily trading range for the next session as per the Nifty chart seems to be very wide now from 8,020 to 9,128.
Bank Nifty also followed the broader Index and closed at 20,580.20 with a net loss of 1,574.95 points making a big bearish candle pattern on the daily chart. New resistance levels are at 20,805, 21,137, 21,675, and 22,007 while key support levels are at 20,268, 20,002, 19,718, and 19,435. The Trading range for BN looks between 19,435 to 21,675 from the chart. Max OI on PE is at 20,000 and Max OI on CE is at 23,000. With the PCR for the current OC series (19th Mar) at 0.28 Bank Nifty indicates a negative bias and huge volatility.
As per Nifty Option Chain data (19th Mar), Put writing was observed at 7,500 and 8,000 whereas Call writing was also seen from 8,500 to 9,500. The unwinding of Call was minimal while a small quantity of Put unwinding was observed at higher levels. The resistance and support levels have moved wide on the lower side indicating more volatility in the coming sessions with negative bias. Max OI in PE is at approx 8,100 and CE is at 10,000. The PCR for the current series is 0.38 while the month-end series is 1.00 which indicates bearishness. OI data shows the possibility of the next trading range between 7,800 to 9,000 with volatile swings. Traders are advised to be careful from volatility and trade only trends with options strategies with close stops.
Technical analysis with a sound understanding of the market is the key to trading success; however, unexpected (domestic or international) factors make the technical analysis go haywire for a while, hence we have to monitor fresh data and new dynamics of the market during trading hours to consistently make money. We trust the information will be helpful in your own analysis of the market and make trading a profitable and better experience. This analysis has been shared for educational purposes. Please seek your financial adviser’s guidance before trading or investing.
Happy Trading and Keep investing safely!
