On the options front, maximum Put open interest is seen at 10000 followed by 10200 strikes while maximum Call open interest is at 10500 followed by 10400 strikes.
Bears took control of D-Street from the word go as a Nifty break below crucial support levels one after the other on Friday and made a strong bearish candle which closely resembles Bearish Belt Hold kind of pattern on the daily charts.
The bias has now tilted in favour of the bears and a break below 200-day moving average in the coming week could extend the selling pressure.
The Nifty took support near its 200-DMA on last two occasions (7th and 8th March) and then bounced back. Now, a break below this level which is placed around 10,160 could push the index towards its next crucial support level placed at 10,000.
The index reversed gains after hitting an intraday high of 10,478.60 levels when Nifty made a ‘Shooting Star’ kind of pattern on the daily candlestick charts.
“The Nifty50 appears to have resumed its downtrend as it registered a robust bear candle with a cut of around 160 points which is threatening the recent lows of 10,140 levels,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“If a fresh leg of the downtrend is in progress from the highs of 10,478 levels then ideally it should breach the recent lows of 10,140 and then initially head towards its 200-Day Exponential Moving Averages whose value is placed around 10,114 kinds of levels,” he said.
Mohammad further added that in between multiple support points are available in the zone of 10,160 – 10,140 levels which may provide some temporary relief to bulls from the current carnage.
“For time being upsides shall get capped around 10,350 kind of levels and rally towards 10,300 can be sold into for initial targets placed in the zone of 10,040-9,980 kind of levels,” he said.
India VIX moved up by 6.21 percent at 15.22. Rise in volatility after the recent consolidation seen in the last five sessions has given an upper hand to bears which suggest more weakness. A fall in Put Call Ratio also points to the same direction.
On the options front, maximum Put open interest is seen at 10000 followed by 10200 strikes while maximum Call open interest is at 10500 followed by 10400 strikes.
Significant Call writing was seen at 10300 and 10200 strikes which is shifting its resistance to the lower zones while Put unwinding was seen at 10400 and 10300 strikes which is giving the further scope and fear of decline.
“Option band signifies a lower trading range between 10,100 to 10,350 zones. The Nifty index formed a Bearish Belt Hold candle on the daily scale and corrected by around 165 points on the daily closing basis,” Chandan Taparia, Derivatives, and Technical Analyst at Motilal Oswal Securities told Moneycontrol told Moneycontrol.
“It has broken immediate support of 10,333, 10,276 zones and slipped towards 10,180 levels. Now till it remains below 10,276 zones, weakness could continue towards recent swing low of 10,141 then psychological 10,000 zones while on the upside hurdles are seen at 10,276 then 10,333 levels,” he said.