The Nifty 50 started off the week on a positive note and finally surpassed the much-awaited psychological 22,000 mark on January 15. The index remained strong throughout session with maintaining higher highs, higher lows formation for three days in a row.
With a positive crossover on the momentum indicator RSI (relative strength index) on all timeframes and MACD on weekly & monthly charts as well as pick up in heavyweight sectors, the upward journey towards 22,200-22,500 seems likely in the near term provided it holds 22,000, experts said, adding that the support has been shifting higher to 21,900-21,800 and the crucial support at 21,500 mark.
The Nifty 50 opened higher at 22,053 and traded above 22,000 level for major part of the session. The index added 203 points on January 15 to settle at 22,098 and formed bullish candlestick pattern with long lower shadow on the daily charts, indicating the buying interest at lower levels.
"The major support for the index is situated at the 21,800 levels, and a breach below this would be essential to negate the prevailing trend," said Kunal Shah, senior technical & derivative analyst at LKP Securities.
He feels the next immediate upside targets for the index are positioned at 22,200-22,300 levels. "Sustaining above these levels could potentially lead the index towards the 22,500 mark," he said.
Notably, a rising window pattern emerged on the daily charts, indicating strong bullish sentiment in the market. Hence, the overall strategy remains buy on dip as long as 21,600 on the downside is protected, Omkar Patil, technical & derivatives analyst - institutional equity at Ashika Group advised.
On the options front, 22,500 strike owned the maximum Call open interest, followed by 22,300 & 22,200 strikes, with meaningful Call writing at 22,800 strike, then 22,100 strike & 23,000 strike, while on the Put side, the maximum open interest was visible at 22,000 strike, followed by 21,800 and 21,700 strike.
Hence, the above options data indicated that the Nifty may march towards 22,200-22,300 in near term but also has a possibility of moving towards 22,500 in the short term, with immediate strong support at 21,800-21,700 levels.
Bank Nifty
After IT, the Bank Nifty also got into momentum and finally climbed above 48,000 mark after more than a week period. In fact, the noticing part was that the banking index has seen a breakout of downward sloping resistance trendline and settled tad above the same, which is a positive sign.
The index was up 449 points at 48,158 and formed bullish candlestick pattern on the daily charts, with higher highs, higher lows formation for three days in a row, which indicating the trend reversal from down to up.
"Today it has managed to close above the 48,000 mark and more importantly the 20-day moving average indicating strength. We expect the positive momentum to continue till 48,650 on an immediate basis and above that it can extend till 50,000," said Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas.
On the other side, the volatility also jumped but still way below the last week's high (of 14.55). India VIX, the fear index rose by 5.22 percent to 13.79 from 13.10 levels.
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