The Indian stock market opened the gap up today taking positive cues from international markets. Nifty opened with a gap of 185.60 points on the upper side at 11,387.35 and touched days high at 11,433. The bullishness lived for a short period and the news of Covid 19 spreading in India pulled down Nifty to the day’s low at 11,036.25 before closing at 11,132.75 with a recovery of almost 100 points making a large bearish candle on the daily chart. On the weekly and monthly charts also Nifty formed a bearish candle, indicating the negative bias. In the last few sessions, Nifty has run down very fast and resting at a lower trend line of a new ascending channel. As estimated in our previous analysis it bounced back to 11,400 today but fell due to poor domestic cues. However, international markets have gained some lost ground today, hence one can expect a bounce back from this level.
The DIIs were net buyers with a turnover of 1,138.74Cr while FIIs were net sellers with a turnover of 1,354.72Cr. A total of 15 stocks advanced and 35 declined from the stack of nifty 50 to reflect a bearish market breadth today also. The closing of Nifty at 11,132.75 is below 200DEMA at 11,706 as well as the daily Pivot at 11,254. The daily Stochastic is at 10, in the oversold zone, while RSI is at 24. Nifty is in an extreme oversold zone one can expect a bounce-back towards 11,400 if the market gets some positive cues or short covering.
Nifty’s new resistance levels are 11,187, 11,234, 11,281, and 11,322 while the support levels are at 11,090, 11,036, and 11,000 and 10,936. The new trading range from the chart seems to be from 10,936 to 11,322.
Bank Nifty also followed benchmark Nifty and closed at 28,868.40 with a loss of 278.75 points making a large bearish candle on the daily chart. New resistance levels are at 29,037, 29,181, 29,368 and 29,503 while key support levels are at 28,785, 28,572, 28,305 and 28,043. The Trading range for BN looks between 28,305 to 29,503. Max OI on CE is at 29,500 and Max OI on PE is at 28,500. With PCR for the current OC series (5th Mar) at 0.55 Banknifty indicates a negative bias and volatility.
As per Nifty Option Chain data (5th Mar), Put writing was observed on 11,100 and 11,200 whereas Call writing was seen at 11,300, 11,400, 11,450 levels. The unwinding of Call was seen above 11,500 levels and Put unwinding was observed above 11,500. The resistance and support levels have moved wide indicating more volatility in the coming sessions. Max OI in PE is at 11,000 and CE is at 11,500. The PCR for the current series is at 0.64 and the next series is at 0.52 indicating the fear of bulls and weakness in the Index. OI data shows the possibility of the next trading range between 11,000 to 11,400. Traders are advised to be careful from volatility and trade using options strategy 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!
