The bearish trend continued on Tuesday as Nifty continued to decline and tested its important support levels to end on a negative note. The market started the day negative and weakened as the day progressed. At one point Nifty had slipped below the level of 15,600.
There was some improvement from lower levels in the second half of the session. While the market recovered some of its losses, the last one and a half hours saw weakness again. The index finally ended with a fall of 120 points or 0.76 percent.
Nifty tested its 50-DMA in Tuesday’s session, which is currently at 15,570. Going forward, in the immediate short term, this point will act as important support based on the close. We also record weekly options expiration. High call writing and put unwinding were seen at 15,700 level; Highest Call OI accumulation is being observed at 15,800.
At the bottom, 15,500 holds the maximum put OI, and this is expected to act as support. If a technical snag occurs, levels of 15,700 and higher will provide resistance for the market.
Volatility increased as the India VIX rose 4.14 percent to 13.2050. The 15,680 and 15,765 levels are likely to be tested on Thursday. Support lies at the 15,570 and 15,500 levels.
The Relative Strength Index (RSI) on the daily chart is 45.41. It has marked a new 14-period low, which is bearish. However, the RSI is neutral and shows no divergence against the price. The daily MACD is bearish and remains below the signal line. A black body emerged on the candles. Apart from this, no other formation was seen.
Pattern analysis shows that Nifty has failed to break above the 15,900 level. The index gave an incremental high at 15,962, but the breakout failed to give any confirmation. This makes the region of 15,900-15,950 an intermediate head for the markets.