On Friday, after a week long fall with a loss of 1,057 points, the market made another dent from negative news of Yes Bank moratorium by RBI. As if Covid19 was not enough to pull it down, the market got another double whammy: financial collapse of YB (in the already weak financial sector) and all international markets down from 2.5 to 4%. That altogether led Nifty to a fall of 442 points in a single day. The Nifty opened with a gap down of 326.35 points at 10,942.65 and slipped to 10,827.40 before recovering and closing at 10,989.45. It made a net loss of 279.55 points making a gap down bullish hammer in the daily chart. On the weekly as well as on the monthly chart, the Nifty formed a bearish candle with lower wick representing buys at lower levels.
The DIIs were net buyers with a turnover of 2,543.78Cr while FIIs were net sellers with a turnover of 3,594.84Cr. A complete negative market breadth with a total of 5 stocks advanced and 45 declined from the stack of nifty 50. The closing of Nifty at 10,989.45 is well below 200DEMA at 11,686 and daily pivot. The daily Stochastic is at 40, while RSI is at 26. Nifty has taken support on confluence of lower trend lines of new ascending and descending channels. One can expect a bounce-back towards 11,369 and 11,536 if the market sustains above 11,000 level and gets some positive cues with short covering.
Nifty’s new resistance levels are 11,082, 11,133~62, 11,202, and 11,269 while the support levels are at 10,907, 10,876, 10,826, and 10,747. Nifty remains volatile in the wide trading range from 10,747 to 11,306.
Bank Nifty closed at 27,801.4 with a net loss of 1,013.90 points making a bullish hammer on the daily chart. New resistance levels are at 28,048, 28,225, 28,536, and 28,876 while key support levels are at 27,650, 27,442, 27,162 and 26,993. The Trading range for BN looks between 26,993 to 28,876. Max OI on CE is at 29,000 and Max OI on PE is at 27,000. With the PCR for the current OC series (12th Mar) at 0.65 Bank Nifty indicates a negative bias and huge volatility.
As per Nifty Option Chain data (12th Mar), Put writing was observed on all levels like 10,500 to 10,900 whereas Call writing was also seen at 11,000 to 11,500 levels. The unwinding of Call was missing and Put was seen from 11,100 to 11,300 levels. The resistance and support levels have moved wide on lower side indicating more volatility in the coming sessions with negative bias. Max OI in PE is at approx 10,800 and 10,900 and CE is at 11,300. The data of various Option Chain series suggests the 11,900 as very strong support although 11,000 also appears a good support. The PCR for the current series comes down to 0.77 while the month end series is 1.26 which indicates bearishness and consolidation in upcoming trading sessions. OI data shows the possibility of the next trading range between 10,800 to 11,300 with heavy volatility. 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!
