A close above 11,958 can again give some hope to the bulls who can then attempt to test the life-time highs of 12,041, Mazhar Mohammad said
Nifty traded lower for major part of session to snap three-day winning streak and closed in the red on May 29 ahead of the expiry of May futures and options contracts on May 30. The index formed a bearish candle on daily charts.
Former Finance Minister Arun Jaitley's decision not to be a part of the new government and trade war tensions dampened market sentiment.
Overall the index has negated the formation of higher lows of last three sessions and got stuck in the wider trading range of elections day. It failed to surpass previous day's closing of 11,930 and drifted towards 11,835 during the day.
Nifty is stuck in the range of 130 points in the last three sessions, between 11,800 and 11,950. It now requires a decisive range breakout to get some momentum in the market, experts said, adding if the index breaks 11,836 in coming sessions then it can move down towards 11,600.
"Weakness appears to be getting more pronounced as Nifty registered a bearish candle after Hanging Man formation on May 28," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
He said in case if the said index has initiated a fresh leg of downswing from the recent high of 11,958 then eventually this downward leg shall take the indices towards 11,600 where fresh buying opportunity can arise.
Meanwhile at today’s low of 11,836, Nifty appears to have bounced after testing its 5-day simple moving average (11,843), hence, going forward if bears manage to push the index below the said average then correction shall get further accelerated towards its initial targets of 11,600, he added.
Contrary to this, a close above 11,958 can again give some hope to the bulls who can then attempt to test the life-time high of 12,041, Mazhar Mohammad said.
India VIX moved up 3.06 percent to 16.40.
Nifty options: Maximum Put open interest (OI) was at 11,000 followed by 11,800 while maximum Call OI was at 12,000 followed by 12,500. Meaningful Call writing was seen at 12,000 followed by 11,950 while Put Unwinding was seen at all the immediate strikes. Option band signified a trading range of 11,750-11,950.
"Now Nifty index has to hold 11,800 to witness an upmove towards 11,950 then 12,000 while supports are seen at 11,761 then 11,666," Chandan Taparia, Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
Bank Nifty opened negative and witnessed selling pressure towards 31,250. It finally negated its formation of higher lows after eight consecutive sessions that implies some pause in positive momentum.
The index closed 302.35 points lower at 31,295.55 and formed a bearish candle followed by a Hanging Man daily scale that suggests follow up is missing at higher levels, experts said.
Now Bank Nifty has to hold near to 31,150 to witness upmove towards 31,500 then 31,750 while major support exists at 31,000 then 30,500 zones, Chandan Taparia said.
