Just as we thought the bulls regained their hold on D-Street last week, bears made a comeback pushing Nifty below the crucial support levels as well as its 5 & 13 exponential moving averages (EMA) on Monday. The index formed a bearish candle on the daily charts which also resembles a Bearish Harami kind of pattern.
It seems like the index is stuck in a range of 100-150 points and now a breakout above 10,850-10895, or a breakdown below 10,700 could fuel selling pressure on D-Street. Investors are advised to stay cautious or at best remain neutral, suggest experts.
The Nifty also broke below two key short-term moving averages namely 5-days exponential moving average (EMA) placed at 10,775 and 13-EMA at 10,764.
The Nifty which opened flat rose marginally to hit an intraday high of 10,831. It failed to hold on to momentum and hit an intraday low of 10,753 before closing at 10,762, down 59 points.
Bank Nifty formed an Inside Bar pattern as it moved inside the range of the last session. The index has to now hold above 26,500 zones to witness an up move towards 26,750 and then towards 27,000 zones while a hold below 26,450 could see a dip towards 26,250 zones suggest experts.
â€œMondayâ€™s price action on Nifty with a Bearish Candle formation post Fridayâ€™s strong up move is clearly suggesting that this market is directionless and is in need of a breakout on either of the side for a directional move,â€� Mazhar Mohammad, Chief Strategist â€“ Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
â€œOn the downside, 10,700 still appears to be the critical support and a breach of which should ideally enhance selling pressure with bright prospects of Nifty heading towards 10,400 levels whereas on the upside 10,850 is still acting as a hurdle which needs to be conquered to unleash a fresh leg of up move in northern direction,â€� he said.
Mohammad further added that till such a breakout in either of the directions takes place this market shall continue to remain listless in the expiry week and it looks that traders will be better off by adopting a neutral stance.
India VIX moved up by 4.68 percent at 12.58 levels. On the options front, maximum Put OI is placed at 10,700 followed by 10,600 strikes while maximum Call OI is placed at 11,000 followed by 10,800 and 10,900 strikes.
The Nifty closed at 10,762.5 on Monday. According to Pivot charts, the key support level is placed at 10,733.33, followed by 10,704.17. If the index starts moving upwards, key resistance levels to watch out are 10,811.33 and 10,860.17.
The Nifty Bank index closed at 26,609.7 on Monday. The important Pivot level, which will act as crucial support for the index, is placed at 26,520.16, followed by 26,430.63. On the upside, key resistance levels are placed at 26,752.06, followed by 26,894.43.
Maximum call open interest (OI) of 54.90 lakh contracts was at the 11,000 strike price, which will act as a crucial resistance level for the index in the June series.
This was followed by the 10,800 strike price, which now holds 44.58 lakh contracts in open interest, and 10,900, which has accumulated 44.40 lakh contracts in open interest.
Call writing was seen at the strike price of 10,800, which added 13.05 lakh contracts, followed by 10,900, which added 11.86 lakh contracts and 11,000, which added 7.32 lakh contracts.
Call unwinding was seen at the strike price of 11,200, which shed 2.74 lakh contracts, followed by 11,100, which shed 1.77 lakh contracts.
Maximum put open interest of 46.95 lakh contracts was seen at the 10,700 strike price, which will act as a crucial base for the index in June series.
This was followed by the 10,600 strike price, which now holds 37.97 lakh contracts in open interest, and the 10,200 strike price, which has now accumulated 29.07 lakh contracts in open interest.
Put unwinding was seen at the strike price of 10,700, which shed 10.11 lakh contracts, followed by 10,800 which shed 5.72 lakh contracts and 10,600, which shed 4.93 lakh contracts.
Foreign institutional investors (FIIs) bought shares worth Rs 198.68 crore, while domestic institutional investors sold shares worth RsÂ 86.22Â crore in the Indian equity market, as per provisional data available on the NSE.
High delivery percentage suggests that investors are accepting delivery of the stock, which means that investors are bullish on it.
A decrease in open interest along with an increase in price mostly indicates short covering.
An increase in open interest along with a decrease in price mostly indicates build-up of short positions.
Blue Star: The firm had an interaction with MFS Investment on June 25, 2018.
Bharat Forge: UBS Global AMC and Hermes Investment Management will meet the firm on June 27-28, 2018.
Securities in ban period for the next day's trade under the F&O segment includes companies in which the security has crossed 95 percent of the market-wide position limit.