Technical View: Climb above 22,500 may confirm Nifty's journey towards another record high

Nifty Uptrend

The Nifty 50 remained choppy for yet another session, especially ahead of the monthly F&O expiry scheduled on April 25 and closed higher for the fourth straight day on April 24. The index finally settled above the 22,400 level and entered into the big downside gap created on April 15. If it manages to successfully fill the downside gap by crossing 22,500 then the index may possibly inch towards 22,700-22,800 levels, with support at the 22,300 mark, experts said.

On April 24, the Nifty 50, as expected, opened higher above 22,400 and climbed up to 22,476, but saw some selling pressure in the last hour of trade. Towards the end, however, it managed to rebound and closed at 22,402, up 34 points, forming a small bearish candlestick pattern with minor upper shadow on the daily charts.

Technically, this pattern indicates rangebound movement in the market around 22,450-22,500 levels.

"Nifty is currently placed near the crucial overhead resistance of the previous opening downside gap of April 15 around 22,500 levels. As long as the Nifty fails to show any sharp decline from near the key resistance, there is a higher possibility of a decisive upside breakout of the said resistance in the near term," Nagaraj Shetti, senior technical research analyst at HDFC Securities said.

He feels the short-term trend of Nifty is rangebound with a positive bias. "The present rangebound action could eventually result in a decisive upside breakout in the near term. A decisive move above 22,500 is expected to open the next upside target of 22,800 levels in the near term. Immediate support is at 22,300-22,250 levels," he said.

The monthly options data indicated that 22,500 is the expected next key resistance for the Nifty 50 on the monthly expiry day, followed by 22,700, with support at the 22,300 level.

On the Call side, the maximum open interest was seen at 22,500 strike, followed by 23,000 strike and 22,700 strike, with meaningful writing at 22,500 strike, then 22,700 and 22,900 strikes, while on the Put side, 22,000 strike owned the maximum open interest, followed by 22,300 and 22,400 strikes, with writing at 22,400 strike, then 22,300 and 21,900 strikes.

Bank Nifty

The Bank Nifty maintained its upward journey for four days in a row, rising 219 points to 48,189 and forming an Inside Bar pattern which resembles the Bullish Harami kind of candlestick pattern on the daily charts (not the exact one).

"The Bank Nifty saw a sideways trading session following a positive start, holding firm around the support zone of 48,000-47,800. Immediate resistance is noted at 48,500, and a decisive breakthrough could signal further upside towards 49,500/50,000 levels," Kunal Shah, senior technical & derivative analyst at LKP Securities, said.

He feels with the overall sentiment remaining bullish, any pullbacks towards the support zone should be viewed as buying opportunities.

Meanwhile, India VIX, the fear index, rebounded 0.78 percent to 10.28 level, from 10.2, after a nearly 20 percent fall in the previous session.

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