Mazhar Mohammad said in case if 10,782 level is breached on closing basis then the said index shall head towards the zone of 10,566–10,497 levels.
Nifty after roller-coaster ride finally drifted lower in late trade and closed sharply down on August 7 as the 35bps repo rate cut by Reserve Bank of India failed to revive sentiment ruined by the economic slowdown and mixed earnings.
The index reversed its previous day's gains and closed below 10,900 to form bearish candle on daily charts, but defended recent corrective swing low of 10,782. this means there could be consolidation in coming sessions amid subdued sentiment, experts feel.
"Bulls failed to cheer the markets, despite rate cut from the RBI, as growth concerns appears to have taken a toll on the market participants which resulted in the bearish candle formation thereby dissipating the hopes of a pullback attempt," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
He said at this juncture, Nifty needs to consolidate by defending recent corrective swing low of 10,782 to prevent further damage. In such a scenario, with couple of days consolidation Nifty can stage a pull back rally and strength in this regard should be confirmed on a close above 11,018 level, he added.
Mazhar Mohammad said, however, in case if 10,782 level is breached on closing basis then the said index shall head towards 10,566–10,497.
He advised traders to maintain a tight stop below 10,783 on closing basis for long positions if any, whereas fresh positional shorting opportunity can be considered on a close below 10,783.
On the options front, maximum Put open interest is at 11,000 followed by 10,700 strike while maximum Call OI is at 11,000 followed by 11,500 strike.
Highest Call writing is at 11,500 followed by 11,100 strike while Put writing is at 10,700 strike. Options data suggests the Nifty could trade in a range of 10,700 to 11,200 zones.
India VIX moved up by 3.85 percent to 16.74 level.
Bank Nifty index failed to surpass 28,250 and drifted lower towards 27,650. The index closed 320.05 points lower at 27,702.05 and formed a bearish candle on the daily scale as selling pressure was seen at latter part of the session.
"Now till it holds below 28,000, weakness could continue towards next support of 27,500 then 27,350; while on the upside hurdle is seen at 28,000 then 28,250," 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.
