Bank Nifty posted biggest daily loss since April 2016 and formed a big bearish candle on daily chart
Nifty50 started the day volatile and once the Budget speech started it fell as Budget failed to cheer the market. The index fell sharply towards the end of the day to close 2.5 percent lower.
The index closed slightly below 200-day EMA and formed Long Black Day kind of candle on daily charts as closing was far lower than opening. For the week also, it formed large bearish candle on weekly scale as it shed 4.8 percent.
Experts feel there could be consolidation in the coming session also, but the sentiment may remain weak given the current sharp fall and 11,633 would be key level for further direction on either side.
Nifty50 after opening lower at 11,939 managed to rebound before the Budget speech and hit an intraday high of 12,017.35, but towards the end of speech, it fell sharply and hit a day's low of 11,633.30. The index closed 300.20 points lower at 11,661.90.
"Nifty50 registered a Long Black Day kind of formation as it shaved off almost 3 percent from intraday high of 12017. In this process it also tested its 200-day exponential mving average (11,663) with a intraday low of 11,633 levels. As index is hovering around its 200-day moving average, some consolidation can't be ruled out in the next session," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
However, as trend appears to be decisively turned in favour of bears, rallies can be used to create fresh short positions, he said.
He feels in case if index slips below 11,633 levels then next logical target can be placed around 11,342 levels whereas on stability a bounce can be expected into the zone of 11,779–11,825 levels which shall provide an ideal opportunity to initiate fresh shorts on signs of weakness.
For time being, Mazhar Mohammad advised traders to remain neutral on long side whereas in next session shorting can be considered if Nifty trades below 11,633 levels for more than 30 minutes for a target of 11,400 levels with a stop above intraday's high.
Option data is scattered at various strikes being the beginning of the new series. Maximum Put open interest was at 12,000 followed by 11,500 strike while maximum Call open interest was at 12,200 followed by 12,500 strike.
Call writing was seen at 12,200 then 12,000 strike while Put unwinding was seen at most of the immediate strikes.
Above mentioned Option data indicated the Nifty could trade in a range of 11,300 to 11,900 levels in coming sessions.
India VIX fell by 3.08 percent to 16.83 levels as the major event - Budget - passed.
Bank Nifty posted biggest daily loss since April 2016 and formed a big bearish candle on daily chart. The index kept on making lower lows as the day progressed and closed below its crucial support of 200 DEMA, down 3.28 percent at 29,820.90.
"Bank Nifty continued its bearish momentum for third consecutive week and formed a bearish candle on weekly chart. Overall, sentiment dampened and chart structure turned negative due to sharp sell-off in the banking space. Now, immediate resistance for Bank Nifty is placed at 30,200 and 30,600 levels; while index can continue its pessimism towards its next support of 29,400 and then 29,000 levels," Chandan Taparia said.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
