Mazhar Mohammad said as market appears to be directionless, traders for time being are advised to remain neutral on the indices.
Nifty consolidated throughout the session and lower for second consecutive day on June 24. The liquidity crisis and weak global cues led to the fall.
The index closed below 11,700 and formed bearish candle resembling a spinning top on daily charts.
Spinning top is often regarded as a neutral pattern that suggests indecisiveness in the market. It can be formed in an uptrend as well as in a downtrend.
India VIX moved up 3.91 percent to 15.18.
Dips are being bought into while supply pressure is intact at higher zones, which indicate that consolidation will continue in coming sessions. But if the index decisively breaks 11,625, then selling pressure can intensify, experts said.
Nifty after opening flat at 11,725.80 hit an intraday high of 11,754, but erased all gains in initial hour itself and slipped into the red to hit a day's low of 11,670.20. The index remained volatile for a major part of the session and closed 24.40 points lower at 11,699.70.
"Nifty's movement for last two sessions is still curtailed inside the long bullish candle, i.e., between 11,843–11635, registered on June 20," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
He said unless the low of 11,625 is decisively breached on the downside, the current movement of the last two sessions can still be read as a consolidatory move in nature.
Nevertheless, a decisive close below 11,625 can set the tone for a fresh breakdown that may then drag the indices into the euphoric gap zone of 11,591–11,426, whereas strength on the upsides shall resume only on a close above 11,843, he added.
Mohammad said as the market appears to be directionless, traders for time being are advised to remain neutral on the indices.
For Nifty options, maximum Put open interest (OI) was at 11,700 followed by 11,500 while maximum Call OI was at 12,000 followed by 11,800. Marginal Call writing was seen at 11,800 followed by 11,900, while Put unwinding was seen at 11,800 followed by 11,700.
Experts feel the options data suggests a slight shift an immediate trading range to 11,600-11,900.
Bank Nifty failed to surpass its previous day's high but consolidated in a narrow range of 200 points for most of the session. The index closed at 30,602.05, down 26.30 points and formed a small bearish candle on the daily scale but managed to hold above 30,500.
"Now it has to continue to hold above 30,600 zone to extend its move towards 31,000 while on the downside multiple supports are seen at 30,250 zone," Chandan Taparia, Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.Subscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more.
