India Finance News

Technical View | Nifty forms Doji candle, experts warn can slip to 15,500 – Moneycontrol

The Nifty nosedived more than 2 percent on March 7, as the Russia-Ukraine war pushed oil prices above $130 a barrel over supply concerns, fanning fresh inflation and growth worries.

The index closed near its opening level to form a Doji pattern on the daily chart, indicating indecisiveness among the bulls and the bears.

On the fourth straight session of the fall, the Nifty broke the crucial 16,000-mark and closed 382 points down at 15,863, indicating growing nervousness about the Russia-Ukraine conflict that entered its twelfth day.

The index can slip to 15,500 if the selling extends and 15,700 gets broken in the coming session, experts have said.

The volatility remained on the higher side, indicating turbulence ahead. India VIX, the fear index, rose 5 percent to 29.33. The index has jumped more than 80 percent this year.

Also read: Taking Stock | Boiling oil prices spook markets; Sensex tanks 1,500 pts, Nifty at 7-month low

The Nifty50 witnessed yet another day of a gap-down opening, before signing off the session with a Doji formation due to weak global cues, said Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia. “However, at today’s intraday low of 15,711 levels, the Nifty retraced around 62 percent of the last leg of the rally from the April 2021 lows of 14,151 to a high of 18,604 levels,” he said.

The market was completely in the grip of fear due to geopolitical uncertainties and technical levels may not be respected, Mohammad said.

Technically, on the upsides, the day’s bearish gap zone of 15,945 and 16,133 would act as the near-term hurdle. On the downside, if the Nifty fails to sustain above 15,700, it can initially slide to 15,500.

Mohammad said it would be prudent to remain neutral on the direction of the market.

Also read:  Gainers & Losers: Five stocks that moved the most on March 7

On the options front, maximum Call open interest was seen at 18,000 strike followed by 17,000 strike while maximum Put open interest was seen at 16,000 strike followed by 15,500 strike.

Marginal Call writing was seen at 16,300 then 16,500 strikes while marginal Put writing was seen at 15,300 strike. Option data indicated a wider trading range for the Nifty at 15,500 to 16,500 levels for coming sessions.

A positive setup was seen in ONGC, Hindalco Industries, Coal India, GAIL, Vedanta, NALCO, NMDC, Bharti Airtel, UPL, Petronet, L&T Infotech, HCL Technologies, Tata Steel, Coforge and Infosys, said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.

However, Godrej Consumer Products, Bank of Baroda, Piramal Enterprises, IndusInd Bank, IRCTC, Maruti Suzuki, City Union Bank, InterGlobe Aviation, United Spirits, Bajaj Finance, Bajaj Finserv, Shriram Transport Finance, Escorts, Motherson Sumi, UltraTech Cement, M&M, M&M Financial, Hero MotoCorp and Canara Bank saw a weak setup.

Also read: Rupee plummets 84 paise to all-time low of 77.01/USD amid Ukraine crisis

Banking index

The Bank Nifty started more than 1,100 points down and sank to 32,376. It recovered around 500 points from the intraday low and settled 1,536 points, or 4.5 percent, lower at 32,871.

“The index has been making lower lows from last five trading sessions. Now till it holds below 33,500 levels, weakness could be seen towards 32,500 and 32,000 levels whereas resistance can be seen at 34,000 and 34,500,” Taparia said.

The broader markets also corrected sharply, with the Nifty midcap 100 and smallcap 100 indices declining 2 percent each.

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