Nifty began the new week and month on a negative note as the benchmark index ended in the red on May 2, extending losses into the second consecutive session.
The index opened at 16,924.45 against the previous close of 17,102.55 and touched the intraday high and low of 17,092.25 and 16,917.25 respectively. Finally, the index closed 33 points, or 0.20 percent lower at 17,069.10.
Among the sectors, Nifty Consumer Durables fell 2.02 percent while IT and auto index ended 1.53 percent and 1.26 percent lower, respectively. Nifty Bank closed with a mild gain of 0.21 percent at 36,163.75.
The Nifty is holding above the level of 16,800, but at the same time, it is failing to show sustained momentum. The market appears to be consolidating within a broad trading range of 17,400 and 16,800.
"We may not see any trending move in the market unless it crosses the 17,400 or breaks the 16,800 level. A close below the same will be negative for the market. Also, the volatility index is well above the 20 level, which is an indication that the market is about to break the trading range in the near future,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
Sumeet Bagadia, Executive Director of Choice Broking pointed out that on the call side, the highest open interest (OI) was witnessed at 17,300, followed by 17,500 strike price while on the put side, the highest OI was at 16,800, followed by 17,000 strike price.
"Closing above 17,300 would define a clear trend for taking a long position. At present, the index is having support at 16,900, followed by 16,800 while resistance is placed at 17,300. On the other hand, Bank Nifty has support at 35,500 while resistance at 36,800," said Bagadia.
As per Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in, the next logical target for the Nifty on the upside can be 17,400. As the index smartly bounced back on a couple of occasions from sub 16,900 levels, a
close below 16,900 can significantly weaken it with a near-term target of 16,400, said Mohammad.
For, the time being, brave hearts who want to remain on the long side of the index are advised to place a stop below 16,900 on a closing basis and look for a target of 17,400, he added.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies and not of Mint Genie.