Technical View: Bulls may charge up further if Nifty decisively closes above 22,750

Nifty Trend

The Nifty 50 gained strength in late morning deals after volatility and closed nearly 1 percent higher, extending its northward journey for the second consecutive session on March 6. With Thursday's rally, the index closed the down-gap of February 28 and finished well above 22,510. The next hurdle is placed at 22,750, the higher end of the down-gap from February 24. If the index decisively surpasses and closes above it, 23,000 will be the next level to watch on the upside. However, 22,250 is likely to be the immediate support, followed by 22,000 as the crucial support, according to experts.

The Nifty 50 opened higher at 22,476 but immediately lost those gains. After some volatility, the index recouped those losses in late morning deals and extended gains as the day progressed. It finished at 22,545, up 207 points (0.93 percent), and formed a bullish candlestick pattern with a long lower shadow, resembling a Hanging Man-like candlestick pattern (not a classical one) on the daily charts after a rally. There was buying interest at lower levels. Generally, this is considered a bearish reversal pattern, but the confirmation will only be seen in the following session.

According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, the initial hurdle of the 22,500 level has been surpassed, and Nifty closed above it. This market action signals increasing strength in the upside momentum.

"The next upside resistance to be watched is around 22,750-22,800. Immediate support is placed at the 22,250 level," he said.

The weekly options data indicated that the Nifty may trade in the range of the 22,000-23,000 zone in the short term.

On the Call side, the maximum open interest was seen at the 23,000 strike, followed by the 23,500 and 22,500 strikes, with the maximum Call writing at the 23,100 strike, followed by the 22,800 and 23,000 strikes. On the Put side, the 22,500 strike holds the maximum open interest, followed by the 22,000 and 21,800 strikes, with the maximum Put writing at the 22,500 strike, and then the 22,400 and 21,800 strikes.

Bank Nifty

The Bank Nifty remained on the higher side for three consecutive days, rising 138 points to 48,628, and forming a bearish candle with a long lower shadow on the daily charts, indicating buying interest at lower levels. It resembles a Hanging Man-like pattern.

"Immediate support lies at 48,550, and any dips toward this level could provide buying opportunities. A bounce from support could push the index toward 49,100, with a further breakout opening doors to 49,300," said Anshul Jain, Head of Research at Lakshmishree Investments.

Traders should watch for sustained buying momentum and price action near support levels for confirmation of the next directional move, he advised.

The India VIX, the fear factor, remained in the lower zone and below all key moving averages, though it gained 0.4 percent to 13.73.

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