Technical View: Nifty forms long bullish candle on weekly charts, likely to hit new high in April series

Nifty likely to hit new high in April series

The Nifty 50 extended northward journey for yet another session, especially after surpassing falling resistance trendline in previous session, and finally closed the monthly F&O expiry day with nearly a percent gains on March 28.

Considering the momentum, the index may surpass its previous record high of 22,526 in coming days, provided it holds 22,200-22,300 levels in the new series, starting from April 1, while the support is likely to be at 22,000 mark, experts said.

The Nifty 50 opened higher at 22,164, which was also its day's low, and climbed up to 22,516, an intraday high, but there was a bit of profit booking in late trade. Still, the index closed on a strong note, up 203 points at 22,327 and formed bullish candlestick pattern with upper shadow on the daily charts.

On the weekly basis, it was up 1 percent and formed long bullish candlestick pattern with higher high, higher low formation on the weekly charts. It also remained above 10-week EMA (exponential moving average), which acted as a support on closing basis since November 2023.

"This daily charts pattern indicates high volatility in the market near the all-time highs around 22,500 levels. One may expect Nifty to find supports from the lows and is expected to move up further," said Nagaraj Shetti, senior technical research analyst at HDFC Securities.

He feels the near-term uptrend of Nifty remains intact with high volatility. "The next upside levels to be watched around 22,500-22,600 in the next week. Immediate support is at 22,250-22,200 levels," he said.

The monthly options data indicated that 22,300 is expected to be crucial for the further Nifty direction with hurdle on the higher side at near record high levels (which is in between 22,500-22,600 levels), and support at 22,000 mark.

On the Call side, the maximum Call open interest was seen at 22,300 strike, followed by 22,600 and 22,500 strikes, with meaningful writing at 22,300 strike, then 22,700 and 22,600 strikes, while on the Put side, 22,300 strike owned the maximum open interest, followed by 22,000 & 22,400 strikes, with writing at 22,300, then 22,400 strikes.

Bank Nifty

The Bank Nifty finally climbed above 47,000 mark after four-day of consolidation. Also the index got back above the downward sloping resistance trendline which earlier acted as a support in previous swing high and further the index now traded above all key moving averages, which all are positive factors.

The banking index rose 339 points to 47,125 and formed bullish candlestick pattern with upper shadow on the daily charts, while during the week, the index gained half a percent and formed long bullish candlestick pattern on the weekly charts.

"After a period of bullish resurgence, the Bank Nifty index exhibited strength by surpassing the 20-day moving average hurdle set at 47,000, backed by significant volumes. Despite this, it faced resistance around the 47,500 mark," said Kunal Shah, senior technical & derivative analyst at LKP Securities.

He feels a decisive breach above this resistance could propel the index towards the 48,000 level.

Conversely, "the immediate support is situated at the 47,000-46,800 zone. A conclusive drop below this support level, especially on a closing basis, might indicate a false breakout scenario", he said.

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