The Nifty50 remained higher along with volatility and range-bound trade for a major part of the session and closed the first day of the week on a positive note, June 12. Traders may be waiting for the CPI inflation numbers for May due later part of the day.
The index opened higher at 18,595 and traded largely in a 50-point range with an intraday high of 18,634 and a low of 18,560. Finally, the index settled with 38 points gains at 18,602 and formed a Doji or Inside Bar kind of candlestick pattern on the daily scale. Generally, Doji indicates indecisiveness among bulls and bears about the future market trend, while Inside Bar suggests that the index moved within the previous day's trading range.
Even in the hourly charts, the index did not break its Mother candle generated at the beginning of the trading hour on June 12. Hence, the Nifty50 is likely to remain volatile in coming sessions, with crucial support at 18,500, followed by 18,450, whereas 18,700-18,800 is expected to be a critical resistance area before the record high (18,8870 of December 1 last year), experts said.
"The Nifty50 sustained its position above a critical near-term moving average, indicating stability in the market. Whereas, the relative strength index (RSI) showed a bearish crossover, suggesting a potential weak momentum," Rupak De, Senior Technical at LKP Securities said.
For Nifty, he feels the initial support is expected to be found at the level of 18,600, where significant Put writing has been observed.
"This indicates that there is buying interest at this level, potentially providing a floor for the index. On the other hand, resistance levels are seen at 18,650 and 18,800, indicating potential barriers for the Nifty's upward movement," Rupak said.
On the Option front, the 18,700 strike owns the maximum Call open interest, followed by 18,600 and 18,800 strikes, with meaningful Call writing at 18,600 strike, then 18,800 strike, whereas the maximum Put open interest was at 18,600 strike, followed by 18,500 strike, with Put writing at similar strikes, in similar flow.
The above data indicated that 18,600-18,500 is acting as a support and the 18,700-18,800 zone will be resistance for the Nifty.
"As of now, the current expiry seems to be hinting towards rangebound movement between 18,450 and 18,750 on the upside," Rahul Ghose, Founder & CEO at Hedged said.
Bank Nifty
Bank Nifty also remained range-bound opening higher at 44,035 but failed to sustain the 44,000 mark in the later part of the session to hit a day's low of 43,874. The index settled at 43,944, down 45 points and formed small bodied bearish candlestick pattern on the daily charts, making lower highs and lower lows formation.
"Bank Nifty seems to have become the bigger laggard even though it has strong Put writing at 44,000, 43,500 and the 43,000 level. But this Index needs to close above the 44,550 mark for nifty to scale its all-time highs," Rahul Ghose said.
Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities also said heavy open interest in the 44,000 Call Option (CE) and Put Strike suggests a significant level of trading activity and a fight between the bears and the bulls. This indicates that market participants have conflicting opinions and expectations regarding the future direction of the index," he added.
However, the broader markets were back in action again, after a couple of days' break, with the Nifty Midcap 100 and Smallcap 100 indices rising 0.55 percent and 0.87 percent, respectively, on positive breadth.
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