By Chandan Taparia
Nifty50 opened with a gap down on Monday and witnessed sustained selling pressure for the second consecutive session by drifting towards the 11,520 mark. It formed a Bearish Belt Hold pattern followed by a Bearish Engulfing Candle on the daily chart as the bears tightened grip on the market.
It broke its multiple support in the 11,600 – 11,650 zone and closed below the same after 35 trading sessions. The index slipped and closed below the 50-day EMA and went inside the gap-up area occurred on May 20. As long as it holds below 11,650 level, Nifty could drift further towards the 11,420 level, while on the upside, a hurdle is seen at 11,720 and then 11,777 level.
On the options front, maximum Put open interest was at 11,300 followed by 11,500 levels, while maximum Call OI was at 12,000 followed by 12,500 level. There was seen Put writing at 11,600 and then 11,200 levels, while meaningful Call writing was seen at 11,700 followed by 11,800 levels. The options data suggested a lower trading range in the 11,400-11800 range.
India VIX moved up 7.33 per cent to 14.01 level. Volatility is moving higher after a decline of five sessions.
Bank Nifty fell sharply and corrected nearly 900 points before heading towards its 50-day EMA. It formed a bearish candle after forming multiple Dojis on the daily scale and broke its rising trend line by falling below key supports at 31,313 and 31,000 levels. As long as it remains below 31,000, the index could continue its weakness towards the next major support at 30,250.