Nifty opened a gap up 238.05 points at 7,848.30 and tried to recover the losses. The stock markets worldwide remain under pressure due to virtual lockdown for fear spreading COVID-19. The Nifty remained volatile during the day and closed at 7801.05 with a small gain of 190.80 points making a Doji Candle on the daily chart. On the weekly chart, it made a spinning top whereas, on the monthly chart, it made a bearish candle. The market is still in the grip of bears and needs positive cues from domestic or international markets or a strong short coverage to start moving upwards. The monthly FN&O expiry is just two days away, hence, a bounce-back shall not surprise due to short-covering.
The FIIs were net sellers with a turnover of 2,153.35Cr while the DIIs were net buyers with a turnover of 1,553.66Cr. Market breadth was positive today with 35 stocks advances and 15 stocks declining from the stack of nifty 50. The closing of Nifty at 7,801.05 is well below 200DEMA at 11,408.16 but above the daily pivot at 7784.37. The daily Stochastic is at 24 and RSI is at 23 indicating the market is still in the oversold zone and may consolidate or get a bounce-back.
Nifty’s new resistance levels are at 8,037, 8,159, 8,387, and 8,576 while the support levels are at 7,517, 7,405, 7,230.81, and 7,037.80. The fear gauge (India VIX) is all-time high at 83.6 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 7,038 to 8,576.
Bank Nifty also followed the broader Index and closed at 17,107.30 with a guess of 189.65 points making a hammer candle on the daily chart. New resistance levels are at 17,288, 17,767, 18,370, and 18,858 while key support levels are at 16,600, 16,373, 16,116, and 15,880. The Trading range for BN looks between 15,880 to 18,858 from the daily chart. The PCR ratio for the current series is 0.51.
As per Nifty Option Chain data (26th Mar), Put writing was observed at lower levels from 6,100 to 8,000 whereas small Call writing was also seen from 7,000 to 8,750. A very minimal unwinding of Put was seen at higher levels whereas unwinding of call was seen almost across all the levels. Max OI in PE is at approx 7,000 and CE is at 10,000. The PCR for the current series is 0.91 which indicates a sideways market with bearish bias in the market. OI data shows the possibility of the next trading range between 7,000 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!
