By Sameet Chavan
Our market has seen an optimistic start with a decent gap up, wherein the benchmark index NSE Nifty 50 tested the 17000 mark at the opening bell on Thursday. But soon after, a sell-off got triggered that gradually dragged the index below Wednesday’s low, signifying the strength of the bears at higher grounds. With the intense day of sell-off, Nifty continued the selling streak for the seventh day in a row and settled a tad above the 16800 level with another cut of 0.24 percent.
Technically speaking, the overall sell-off in the broader market has dampened the sentiments, and the 17000 mark in Nifty 50 seems to be a significant hurdle. The technical structure looks very disruptive, with all indicators signalling the trend southwards. Until we decisively claim to the 17000 mark, a sense of tentativeness could be sensed in the comparable period. As far as levels are concerned, the unfilled gap of 16750-16650 is expected to cushion any further correction, while on the higher end, 17000 followed by 17200 is the crucial hurdle for the benchmark index.
FIIs were net sellers in the cash market segment to the tune of Rs 3,599 crore. Simultaneously, in Index futures, they sold worth Rs 1,007 crore with significant fall in open interest, due to the expiry. Recently, we saw a blend of short covering and long unwinding in both the key indices. Rollover in Nifty and Bank Nifty stood at 78% and 82%, which is slightly lower as compared to previous series. Stronger hands continued to curb liquidity and preferred rolling over bearish bets in the index futures segment. On the options front, 16500 put and 17000 call strikes are attracting traders’ attention.
Going forward, the RBI monetary policy is lined up today; hence, traders should keep a close eye on the event. Apart from this, global development should also not be overlooked, and therefore, one needs to avoid aggressive bets and focus on stock-specific actions.
(Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One. Views expressed are the author’s own.)