The Indian stock market faced a tough day on February 23, with the Nifty extending its losses for the fifth straight session and closing at a four-month low. The monthly expiry day for futures & options contracts added to the volatility, as hawkish RBI and US Fed commentaries weighed on investors.
The Nifty index opened higher at 17,575 but quickly slipped to the day's low of 17,455 before rebounding to touch the intraday high of 17,620 in the morning. However, the index failed to sustain its recovery and lost momentum, settling at 17,511, down 43 points from the previous day. The Nifty formed another bearish candle on the daily charts, making lower highs and lower lows for the fifth day in a row.
The index stayed below the long upward-sloping support trendline as well as the 200-day exponential moving average (EMA) of 17,591 for the second straight session. It seems to be taking support at 17,500, which has the maximum Put open interest build-up. Experts believe that if the index holds this level in the coming sessions, it could move towards 17,700-17,800. However, a breach could bring the index down to the 200 daily moving average of 17,362. Going ahead, the low of 17,455 is likely to act as immediate support for the falling Nifty.
A decisive fall below 17,450 can take the index to 17,200–17,150, but if the level holds, the Nifty can climb to 17,750–17,850, where the upper band of the falling channel lies. On the expiry session, the maximum Call open interest was at 17,600, which can be the immediate resistance for the Nifty, followed by 18,000 strike, with Call writing at 17,600 strike, then 17,500 strike. On the Put side, the maximum open interest was at 17,500 strike, followed by 17,000 strike, with writing at 17,500 strike. The data indicates that the Nifty may see a broad trading range of 17,000-18,000 in the coming sessions.
The India VIX fell 3.28 percent from 15.59 to 15.08, but was still on the higher side. The Banking index closed the range-bound session on a flat note, rising 6 points to 40,002 and forming a Doji pattern with a long lower shadow on the daily charts after a five-day fall, indicating indecisiveness among bulls and bears about the market trend. There was buying support at lower levels, hinting at the possibility of a bounce back.
The Bank Nifty has been forming lower highs and lower lows on the daily scale for the last five sessions, and the trading range is gradually shifting lower. Experts believe that until it holds below 40,250 levels, weakness could be seen towards 39,750 then 39,600 zones, while on the upside, the hurdle is placed at 40,250 then 40,500 levels.
In conclusion, the Indian stock market witnessed a tough day on February 23, with the Nifty index closing at a four-month low amid volatility on the monthly expiry day for futures & options contracts. The market seems to be taking support at 17,500, but experts believe that a breach could bring the index down to the 200 daily moving average of 17,362. The Bank Nifty closed on a flat note, forming a Doji pattern with a long lower shadow on the daily charts after a five-day fall, indicating indecisiveness among bulls and bears about the market trend.
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