The Nifty 50 continued to end at a new closing high after yet another rangebound session on March 4, and maintained above upward sloping resistance trendline. The index has formed Doji candlestick pattern on the daily charts at the top of the market, as the closing was near opening levels, and hence, consolidation can't be ruled out with hurdle at 22,500-22,600 on the higher side and immediate support at 22,200, experts said.
The Nifty 50 started off trade higher at 22,404 and after volatility ended at new closing high of 22,406, up 27 points, while the volatility remained below 15 mark, with India VIX down by 0.46 percent to 14.92 level, giving a bit of comfort to bulls.
"Normally, such formations (Doji) after a reasonable upside call for a consolidation or a reversal after the confirmation. Having formed this pattern near the new highs, minor dip or intraday volatility can't be ruled out in the short term," Nagaraj Shetti, senior technical research analyst, HDFC Securities said.
He feels any dips from here could be a buying opportunity towards the supports of 22,225-22,200 levels. "The near-term upside targets to be watched around 22,600-22,800 levels."
On the options front, the maximum Call open interest was seen at 23,000 strike, followed by 22,800 strike and 22,400 strike, with Call writing at 22,400 strike, then 22,500 strike, while on the Put side, the 22,200 strike owned the maximum open interest, followed by 22,000 strike & 22,100 strike, with writing at 22,400 strike, then 22,200 strike.
The above options data indicated that 22,300-22,400 is expected to be crucial area for further direction in the Nifty 50, with support at 22,200 and resistance at 22,500 level.
Bank Nifty
The Bank Nifty moved closer to downward sloping resistance trendline and sustained above the 47,000 mark. The banking index closed 159 points higher at 47,456 and formed a bullish candlestick pattern with upper and lower shadows on the daily charts.
"The Bank Nifty index demonstrated resilience by maintaining strength and holding above the crucial support level of 47,000, where substantial open interest is concentrated on the Put side," Kunal Shah, senior technical & derivative analyst at LKP Securities said.
He feels the index remains in a buy mode, with the potential to surpass its all-time high levels in the near term. "Immediate resistance is positioned at 47,500, and a breakthrough above this level is anticipated to accelerate the momentum towards new lifetime highs."
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