In the topsy-turvy market, yet again the Nifty failed to provide a positive follow through to Tuesday’s upmove. On the flip side, it fell as much as 14,535 and ended with a large bearish candle ahead of the March derivative expiry. Nifty breadth turned negative with 47 out of the Nifty50 components settling in the red. Moreover, all the sectoral indices except pharma ended in the red. Given the fact that India VIX index rose 10%, the ongoing higher price volatility in the Nifty is likely to continue. Immediate trading band is now seen between 14,400-14,750 zones.
Meanwhile, heavy weight index Bank Nifty, which reclaimed the 34,000-mark in the previous session, failed to build on gains post negative start. Breaking below the recent low, the Bank Nifty lost 2.6%. Follow-up action needs to be closely watched out as some amount of sustainability is required for any revival to set in.
The Nifty Auto index faced sharp downticks, resuming its recent corrective phase, while the Metal index lost over 3%. Negative follow-up action could attract further underperformance.
Buy near Rs 1,150
Stop loss: Rs 1,110
Target: Rs 1,230
After losing 14% from the recent high, bulls outstripped bear near Rs 1,100 zone and recovery thereafter was swift, suggesting an immediate floor near Rs 1,110. Sustenance above the same could keep the near-term outlook positive.
Sell April future between Rs 1,800
Stop loss: Rs 1,845
Target: Rs 1,710
Recent failed recovery ensures influence of resistance at play. Sustenance below Rs 1,800 could drag the stock lower till the Rs 1,700 zone.
Amit Trivedi is CMT, Technical Analyst – Institutional Equities, YES Securities. Views are his own.