Bank Nifty end in red after witnessing heavy volatility during the week

Let us understand the technical & derivative overview of Nifty over the week and the expected trend for the next week.

Nifty has ended the week with a bearish engulfing pattern on the weekly chart, which suggests a pause in the rally. The headline index Nifty consolidated for several weeks then it formed a bearish reversal pattern, which has a very big significance, indicating a possibility of a downside move. However, Nifty is yet to give a breakdown from the current level. On the lower end support is seen at 12100; the bullish trend is expected to remain alive as long as Nifty sustains above 12100. On the higher end, resistance is placed at 12350-12400.
 
Bank Nifty has formed a bearish candle for the second consecutive sessions. On the daily chart the index has fallen below 200EMA. The trend is now bearish; however, fresh selling in banking space is expected only below 30600.
 
Derivative Indicators
 
Markets witnessed heavy volatility throughout the week as both the Nifty & Bank Nifty index closed in the red. Bank Nifty index underperformed the Nifty index by ~0.2% as major heavyweights like Kotak Bank and IndusInd Bank witnessed selling pressure after the announcement of their quarterly earnings. FIIs index future long/short ratio trended below 1x mark with marginal addition of fresh short positions.

India Vix index closed the week on a flat note at 15.56, up 10%. On the options front (January 30, 2019 expiry), the Nifty 12000 strike is the maximum open interest pain strike, while 12500CE & 12000PE are the maximum open interest strikes.