It was mayhem on Dalal Street on March 13 as the Nifty sank to its lowest level in 2023, with the turmoil in the global counterparts roiling sentiment following the weekend collapse of the US-based Silicon Valley Bank.
The Nifty opened higher but erased all gains in late-morning deals to remain under pressure for the rest of the session.
The index plunged 259 points, or 1.5 percent, the biggest single-day loss since February 22, to close at 17,154, the lowest closing since October 13.
The index decisively broke previous swing low of 17,255, seen on February 28, hence psychologically vital 17,000 mark is the next level to watch out for.
A break of it can drag the index to 16,900-16,750. On the higher side, the 17,400-17,500 area, which coincides with the 200-day simple moving average (SMA), may act as a hurdle, experts said.
Technically, the market is in the cycle of lower lows – lower bottoms formation.
"As far as levels are concerned, the psychological mark of 17000 is in the vicinity now, followed by 16,900. While on the flip side, the 200 SMA placed around the 17,400-17,450-odd zone is expected to act as a sturdy hurdle in a comparable period," Osho Krishan, Senior Analyst-Technical & Derivative Research, Angel One, said.
One can avoid aggressive bets and keep accumulating quality propositions in a staggered manner, he said.
As the index has fallen considerably since March 8, the Nifty’s expected trading has shifted lower to 16,800 to 17,700 levels in the near term, options data shows.
On the weekly option front, the maximum Call open interest was at 17,500 strike, followed by 17,400 strike, with Call writing at 17,300 strike, then 17,200 strike.The maximum Put open interest was at 17,000 strike, followed by 16,800 strike, with Put writing at 16,800 strike, the 16,900 strike.
Banking index
The Bank Nifty opened negative at 40,356 and after an initial bounce towards 40,690, it remained under sustained selling pressure.
The closed 920 points, or 2.3 percent, lower at 39,565, the worst closing since October 14, 2022, and formed a long bearish candle on the daily scale as massive underperformance was seen in banking stocks.
The banking index has been making lower highs and lower lows on the daily scale for the past two sessions. It closed below its 200-day EMA (40,074).
"Now till it holds below 40,000 levels, the weakness may be seen towards 39,000 then 38,888 levels, whereas on the upside, hurdle shifted lower at 40,000 then 40,400 levels," Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
India VIX, the fear index, rose 20.89 percent to 16.22 levels. Volatility, which has been going for the past five sessions, was at its highest since February 1.
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