The Nifty opened negative on Friday and remained under pressure for most part of the session as every bounce was being sold into. It failed to surpass its previous support of 10,138 and corrected towards the psychological 10,000 level, making fresh seven-month lows.
On the weekly and daily scale, the index has formed a Bearish Belt Hold pattern, which indicates that the bears are maintaining a tight grip on the market. Till it remains below 10,138, overall weakness could continue towards its 52-week low of 9,952, and then 9,800 zone. On the upside, the medium term hurdle is shifting lower to 10,250-10,333 levels.
The 50-share index continued its weak structure in the last week of the October series and made a fresh low near 10,000 levels. Since the technical indicators showed it was in oversold territory, traders were buying around the support zone, but every bounceback was being sold into.
In the last three sessions, India VIX fell 2.83 percent to 19.23 levels after hitting a seven month high of 22.35. Volatility shows no signs of cooling down and that is a concern for the market. It has to fall below 16 levels to rescue the bulls after the sharp cut of the last two months.
On the option front, maximum put open interest (OI) stood at 10,000, followed by 9,800 strikes. Maximum call OI is seen at 10,500, followed by 10,800 strikes. We have seen call writing at 10,100, followed by 10,400 strikes, while put writing is seen at 10,000, followed by 9,800 strikes.
The Bank Nifty breached its crucial support of 24,650 and slipped sharply towards 24,350 levels in the last hour of trade. It formed a Bearish Candle on the daily and weekly scale, which suggests that the bears are maintaining their tight grip on the market.
Till the index remains below 24,650, it can slip towards 24,000 and touch its 52-week low at 23,600 levels. On the upside, the medium term hurdle is seen at 24,750-25,000 levels.
The Nifty continued to trade weak in the October series and corrected 7.77 percent with higher rollovers, which suggests that shorts are rolling over to the next series. The trend could remain under pressure.
The Bank Nifty fell 0.89 percent and comparatively remained resilient, but failed to surpass its major hurdle at 25,500 levels. Shorts are being carried forward as well. Some long carry over in selective private banks may help the index find support on dips.
Stock-wise positive price set-up is seen in Titan, Havells India, Petronet LNG and Bajaj Finance while weakness could continue in state-run banks and automobiles.