The benchmark Nifty remained in the grip of bears today also in the morning by opening the gap down with a loss of 117.15 points at 10,334.30 and which was the low of the day also. The fear of Covid19 helped beers to push Nifty which got recovered some lost ground during the last hour of trading and closed at 10,458.40 with a very small gain of 6.95 points making a bullish candle in the daily chart. On the weekly as well as on the monthly chart, the Nifty formed a bearish candle.
The FIIs were net sellers with a turnover of 3515.38Cr while the DIIs were net buyers with a turnover of 2835.46Cr. Heavy selling by FIIs created a complete negative market breadth with a total of 20 stocks advancing and 30 declining from the stack of nifty 50. The closing of Nifty at 10,334.30 is well below 200DEMA at 11,662 and a daily pivot. The daily Stochastic is at 18.69, while RSI is at 20 in the oversold zone. Nifty is following a descending channel at present and is resting at a lower trend line. If the market slips below 10,294 it will further go down towards 10,000.
Nifty’s new resistance levels are 10,545, 10,643, 10,742, and 10,827 while the support levels are at 10,334, 10,209, 10,105 and 10,004. The recent daily ATR of Nifty has increased substantially and along with fear with the uncertainty of the markets is making Nifty volatile. The daily trading range is very wide now from 10,004 to 10,742.
Bank Nifty also followed the broader market and closed at 26,272.75 with a very small gain of 25.20 points making a small bullish candle with selling pressure on the daily chart. New resistance levels are at 26,791, 27,091, 27,274 and 27,649 while key support levels are at 26,234, 25,923, 25,598, and 25,384. The Trading range for BN looks between 26,000 to 27,000. Max OI on CE is at 27,000 and Max OI on PE is at 26,000. With the PCR for the current OC series (12th Mar) at 0.59 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 9,900 to 10,500 whereas Call writing was also seen at 10,350 to 10,900 levels. The unwinding of Call was seen from 10,950 to 11,250 and Put was seen from 10,550 to 11,200 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 10,000 and CE is at 11,000. The PCR for the current series is 0.57 while the month-end series is 1.19 which indicates bearishness. OI data shows the possibility of the next trading range between 10,000 to 10,700 with volatile swings. 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!
