F&O expiration day: Sensex exceeds 1100 pts, Bank Nifty tumbles 3.3%; Clever support at 17800

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Markets fell sharply and lost nearly 2%, under pressure from weak signals. Image: Reuters

BSE Sensex and Nifty 50 finished below their respective psychological levels on Thursday, thanks to the reservation of profits on the F&O expiration day. BSE Sensex fell 1.9% or 1,158 points to 59,985, while NSE’s Nifty plunged 354 points or 1.9% to settle at 17,857.25. Index heavyweights such as ICICI Bank, HDFC Bank, Kotak Mahindra Bank, ITC, Reliance Industries Ltd (RIL), Infosys, among others, contributed the most to the index decline. Bank Nifty fell 3.34% or 1,365.40 points to stand at 39,508.95. The larger markets also performed in tandem with the equity indices. The BSE Midcap indices fell 1.38% or 354 points, and the BSE Smallcap index fell 1.6% or 444 points. India VIX, the volatility index, jumped 6.4% to finish at 17.91 levels. Technical analysts say that after a long time the Nifty closed below the 20-day SMA which is generally negative for the market.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

Markets finished ahead of the Asian pack as sales intensified on expiration day. After a weak opening, the benchmark Nifty quickly broke the important support level of 18100 and fell sharply thereafter. After a long time, the Nifty closed below the 20 day SMA which is generally negative for the market. For day traders, the short term trend is weak as the market is in a temporary oversold situation, but a rapid recovery cannot be ruled out. The intraday trade setup suggests that 18000 and 18050 would be the key obstacle for traders and below the same level the correction wave is expected to continue to the 17750-17700 levels. Contra traders can take a long bet near 17700 with a strict support stop loss at 17650.

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Jay Thakkar Vice President and Head of Equity Research, Marwadi Shares and Finance

Nifty closed well in negative territory during today’s trading session, however, it has crucial support at 17800 and below those 17600 levels while on the upside 18200 is crucial resistance and up to what it does not close above these levels, the trend will be sideways to negative. In the immediate term, a rebound to 18000/18050 cannot be ruled out as the index appears oversold in the short term. The medium-term trend has reversed, however, from buying to selling.

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As for Nifty Bank, it has broken its crucial support of 40,700 levels and now until it does not close above those levels it may consolidate or be negative. For now it has support in the 39000-39500 range, so it may rebound from current levels, so immediate shorts are not advised at current levels. Nifty Bank is expected to outperform Nifty in the short term.

Yash Gupta, Equity Research Analyst, Angel One

We suggest retail investors stay cautious in the market. Now, we expect the market to be volatile over the coming week and multiple IPOs lined up, taking liquidity away from the market.

Deepak Jasani, Head of Retail Research, HDFC Securities

During the last fall Nifty has not gained support since the high reached on September 24, 7557, a fall could offer support to Nifty while 17968-18034 could offer resistance. The weakness of Nifty could continue but the pace of the decline could now be reduced.

Ajit Mishra, Vice President – Research, Religare Broking

Markets fell sharply and lost nearly 2%, under pressure from weak signals. At first, weak signals from global counterparts weighed on sentiment which deteriorated further with a drop in major indices. Nifty slipped below the crucial support area of ​​the 18,000 mark and settled near the 17,865 area. Selling pressure was widespread and most sector indices ended lower, banking sectors, metallurgical and real estate among the main losers. This drop in the index derailed the recent rally and we may see a further drop in subsequent sessions. On the benchmark front, Nifty has the next support around the 17,550-17,650 area. We reiterate our cautious view of the markets and suggest restricting leveraged positions.

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