The Nifty 50 had a lower start to the truncated week as the index remained under pressure throughout the session and finally settled with a four-tenth of a percent loss on March 26. The index managed to defend the psychological 22,000 mark, but overall, it has still been ranged.
The immediate support for the index may be at 21,950 as breaking the same can drag the index down up to 21,800, while on the higher side, the 22,100-22,200 area can be an immediate resistance for the index, experts said.
The Nifty 50 opened lower at 21,948, which was also its day's low. The index showed recovery up to 22,073 in the morning and remained broadly in the range of 60-70 points for a major part of the session before closing 92 points lower at 22,005.
Overall, the index traded within the previous day's range and formed a bullish candlestick pattern with an upper shadow which resembles an inside body candle on the daily charts, indicating indecisiveness between bulls and bears.
Shrikant Chouhan, head equity research at Kotak Securities is of the view that currently the market is witnessing positive consolidation and for the bulls now, 50-day SMA (simple moving average) or 21,950 could be the sacrosanct support level.
Above the same, he feels the market could move up to 22,150-22,200. On the flip side, "below 50-day SMA or 21,950, the selling pressure could accelerate. Below the same, the market could retest the level of 21,800-21,750," Shrikant said.
According to Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas, the rangebound action is likely to continue in the absence of any near-term triggers. "As we near the monthly expiry of the March series derivative contracts the volatility seems to have dried down resulting in to rangebound moves," he said.
As per the monthly options data, the maximum Call open interest was seen at 22,500 strike followed by 23,000 strike and 22,100 strike with meaningful Call writing at 22,500 strike and then 22,100 and 22,200 strikes, while on the Put side, the 22,000 strike owned the maximum open interest followed by 21,000 strike and 22,100 strike with writing at 21,700 strike and then 21,900 and 21,500 strikes.
The above options data indicated that 21,900 is expected to be a key support area for the Nifty 50 with a hurdle on the higher side at 22,200.
Bank Nifty
The Bank Nifty experienced a subdued start to the truncated week with sideways trading, falling 264 points to close at 46,600, after defending the 46,500 mark. The banking index has formed a small bullish candlestick pattern with a long upper shadow on the daily charts, indicating selling pressure at higher levels, though the closing was higher than the opening levels.
"Immediate support is situated around the 46,500-46,450 zone. A breach below this support area may accelerate downside momentum towards the 46,000 level," Kunal Shah, senior technical & derivative analyst at LKP Securities said.
On the other side, he feels an immediate resistance is noted at 47,000, and a decisive close above this level could trigger significant short-covering rallies towards the 48,000 mark.
The volatility increased, may be given the monthly F&O expiry during the current week, giving some discomfort for bulls. India VIX rose 4.9 percent to 12.82, from 12.22 levels.
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