Covid19 remains heavy in the stock market even on Tuesday. The Nifty opened 88 points gap up but within a few minutes, it was dragged down by bears although bulls tried to defend the ground by taking the Nifty up again to day’s high at 9,403.80. The day had been volatile as estimated earlier with a bearish bias. Nifty closed at 8,967.05 losing 230.35 points at the end of the day making 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 4,044.69Cr while the DIIs were net buyers with a turnover of 3,422.12Cr. Market breadth was negative with 16 stock advancing and 34 declining from the stack of nifty 50. The closing of Nifty at 8,967 is well below 200DEMA at 11,605 and the daily pivot at 9,321. The daily Stochastic is at 35 and RSI is at 17.6 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 while as if Nifty closes below 8,500 then it will visit 8,100 level.
Nifty’s new resistance levels are at 9,078, 9,285, 9,404 and 9,546 while the support levels are at 8,783, 8,712, 8,555 and 8,480. The fear gauge (India VIX) is all-time high at 62.92 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 8,480 to 9,546.
Bank Nifty also followed the broader Index and closed at 22,155.15 with a net loss of 946 points making a bearish candle pattern on the daily chart. New resistance levels are at 22,391, 22,720, 22,996 and 23,511while key support levels are at 21,814, 21,578, 21,351 and 20,956. The Trading range for BN looks between 21,000 to 23,511 from the chart. Max OI on PE is at 21,000 and Max OI on CE is at 24,000. With the PCR for the current OC series (19th Mar) at 0.30 Bank Nifty indicates a negative bias and huge volatility.
As per Nifty Option Chain data (19th Mar), Put writing was observed at 7,700 and 8,000 whereas Call writing was also seen from 9,000 to 9,900. 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 0.42 while the month-end series is 1.08 which indicates bearishness. OI data shows the possibility of the next trading range between 8,100 to 10,000 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!
