Technical View: Bulls can hope of upmove as long as Nifty holds 22,250 despite negative start to the week

Nifty Technical View

The Nifty 50 slipped into the red in the last couple of hours of trading and closed four-tenths of a percent lower on March 10, making a negative start to the week. The index failed to stay above the bearish gap of February 28 or above the 22,500 mark, and closed near the lower end of the said bearish gap. Key support is placed at 22,250. As long as the index holds above this support, an upward move toward 22,700–22,800 is possible. However, a decisive close below this support could open the door to 22,060 (100-week EMA), experts said.

The Nifty 50 opened lower and immediately rebounded to 22,677 in the morning (which coincides with the 20-day EMA). As the day progressed, the index gradually erased those gains and finally slipped into the red in the last couple of hours of trading. It finished at 22,460, down 92 points after three days of gains.

The index formed a bearish candlestick pattern with a long upper shadow (indicating pressure at higher levels), resembling a Shooting Star candlestick pattern (though not a classical one) after the recent uptrend. This is generally considered a bearish reversal pattern, but confirmation will be seen only in the following session.

"A bearish candle on the daily charts indicates further weakness from the current levels. However, the short-term market texture is still on the positive side," said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

For day traders, according to him, 22,500 would be the key level to watch. As long as the market trades below this level, weak sentiment is likely to continue, he added.

Conversely, if the market moves above 22,500, the sentiment could change, and the market could rally to 22,650–22,700, he believes.

The weekly options data indicated that the Nifty may see a trading range of 22,000–23,000 in the short term, with an immediate range of 22,200–22,700.

On the Call side, the maximum open interest was placed at the 23,000 strike, followed by the 23,500 and 22,700 strikes, with the maximum Call writing at the 22,700 strike, followed by the 23,000 and 22,600 strikes. On the Put side, the maximum open interest was at the 22,000 strike, followed by the 22,200 and 22,100 strikes, with the maximum Put writing at the 21,600 strike, followed by the 21,950–22,000 strikes.

Bank Nifty

The Bank Nifty extended its losses for a second consecutive session, declining by 281 points to 48,217, underperforming the benchmark Nifty 50. The banking index formed a small bearish candle with a long upper shadow on the daily timeframe, indicating selling pressure at higher levels but still held above 48,000.

"The 47,850–48,100 zone remains a strong support area, and dips toward this region present buying opportunities," said Anshul Jain, Head of Research at Lakshmishree Investments.

On the upside, an immediate target of 48,900 remains in focus, according to him. Traders should watch price action near support for confirmation of a rebound, he advised.

The India VIX, the fear gauge, rebounded after a day of decline, rising 3.82 percent to the 13.99 zone, which made the bulls a bit cautious. If it continues to rise sharply, the bulls may find themselves in an uncomfortable zone.