Domestic markets may open on a flat note on Tuesday amidst weakness in global markets. Gift Nifty at 22,588 indicates the market will open marginally down. Analysts expect some short covering ahead of F&O expiry on Thursday on the NSE and due to value buying at lower levels. Though the overall undertone remains bearish, analysts expect some technical pull-back.
The recent decline in the benchmark index has resulted in a significant breakdown of the falling wedge pattern, said Osho Krishnan, Sr. Analyst, Technical & Derivatives of – Angel One. Additionally, this breakdown indicates a notable disruption in the structural framework of the market, pointing to dampened sentiment. Examining the Advance Decline ratio reveals a concerning trend, with bears asserting their dominance, particularly evident in the substantial losses experienced within the IT and metals sectors, he said.
Derivative trading also points to weak sentiment.
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Dhupesh Dhameja, Derivatives Analyst, SAMCO Securities, said derivative data continues to reflect a bearish undertone, with call writers maintaining dominance over put sellers, indicating a cautious stance. A significant build-up in open interest at the 23,000-strike call (1.44 crore contracts) establishes a robust resistance zone, while substantial put writing at the 22,500 strike (94.94 lakh contracts) highlights strong support at lower levels. The 22,700–23,000 zone remains under heavy call writing pressure, while unwinding at the lower put strikes suggests a shift toward deeper support levels, reinforcing market fragility. The Put-Call Ratio (PCR) declined to 0.67 from 0.73; reflects sellers’ complete control despite intermittent buying attempts. Meanwhile, the ‘Max Pain’ level at 22,900 implies that while volatility persists, buyers may step in to cushion declines, offering short-term stability.
Volatility Trends
India VIX, the market’s fear gauge, softened by 0.60 per cent to 14.42, indicating a marginal reduction in risk perception. As long as VIX remains below the critical 15 mark, volatility is expected to stay contained, keeping market sentiment cautious, according to SAMCO Securities..
Meanwhile, equities across the Asia-Pacific region are down on early deals on Tuesday, following a weak closing at the US stocks overnight.