By Chandan TapariaNSE Nifty started the session with marginal gains and moved higher in the initial trades on Monday.
But, the index failed to sustain at higher levels and faced selling pressure at around the 12,150 level.
It remained in the negative territory for the major part of the day, and formed a bearish candle on the daily chart. The index continued its selling streak for a third consecutive session and closed a tad below its immediate support of 50-DEMA.
At the current juncture, we are observing the formation of a Bullish Harmonic pattern called Bullish Shark on the hourly chart and Potential Reversal Zone (PRZ) of the same is placed at 12,007–12,018. Looking at the overall chart structure, the ongoing correction may halt around 12,000, and if Nifty holds above that, then we may see an upmove towards 12,250. On the options front, maximum Put open interest was at 12,000 followed by 11,800 strike, while maximum Call OI was at 12,500 followed by 12,300 strike.
Call writing was mainly seen at 12,100 followed by 12,300 strike, while Put unwinding was seen at immediate strike with minor Put writing at 12,050 strike.
Options data indicates an immediate trading range between 12,000 and 12,300 levels. India VIX moved up by 5.84 per cent at the 14.41 level. Bank Nifty continued its corrective move for a third consecutive session, in which it has corrected more than 1,000 points from its recent swing high of 31,649.
The index formed a bearish candle on the daily chart and closed below its previous week’s low.
The banking index is hovering around its support of 50 per cent retracement level of the recent upmove from 29,612 to 31,649, which is placed at 30,631.
If it manages to hold above 30,500, then we may witness an upmove towards 31,200, and then 31,500.
On the flipside, major support below 30,500 mark is placed at 30,200. Nifty futures fell 0.41 per cent to 12,080.
Long builtup was seen in Muthoot Finance, Balkrishna Industries, Manappuram, Mindtree and Torrent Pharma, while shorts were seen in LIC Housing Finance, Glenmark, NCC, Sun TV and Tata Global. (Chandan Taparia is Technical - Derivative Analyst at MOFSL.
Investors are advised to consult financial advisers before taking an investment calls based on these observations)