The Nifty 50 showed healthy recovery for yet another session on December 22 despite a mixed trend in Asian counterparts and went closer to the 21,400 mark during the day with higher high and higher low formation. Considering the bullish sentiment, the index seems to be marching towards 21,600 again, crossing which can take the index into uncharted territory with support at the 21,200-21,000 area, experts said.
The fall in volatility and healthy breadth for the second consecutive session also supported the market sentiment.
The Nifty 50 opened higher at 21,296 and hit a day's high of 21,391. The index fell a bit in mid of the afternoon but rebounded immediately and closed 94 points higher at 21,349 forming a bullish candlestick pattern on the daily charts.
"A bullish candlestick pattern has emerged, reflecting a positive undertone in the price movement," Omkar Patil, technical & derivatives analyst - institutional equity at Ashika Group said.
The index finds support around the 21,000 mark, while resistance is positioned in the vicinity of 21,600, he feels.
For the week, the Nifty 50 fell half a percent and formed small small-bodied bearish candlestick pattern with a long lower shadow on the daily charts, indicating buying interest at lower levels. Despite this fall, the index continued higher highs and higher lows formation for four weeks in a row.
Amol Athawale, Vice President - Technical Research at Kotak Securities is of the view that as long as the index is trading above 21,200, the pullback formation is likely to continue.
"Above the same, the market could move up till 21,500-21,550. On the flip side, below 21,200 the sentiment could change. Below the same, the market could retest the level of 21,100-21,000," he said.
On the weekly options front, the 22,000 strike owned the maximum Call open interest followed by the 21,500 strike with meaningful Call writing at 22,500 strike and then at 22,200 strike and 21,800 strike, while the maximum Put open interest was seen at the 21,000 strike followed by the 20,800 strike with Put writing at 21,300 strike and then 21,400 strike and 20,800 strike.
The above Options data indicated that 21,500 is expected to be near-term resistance for the Nifty 50, with support at 21,200-21,000 levels.
Bank Nifty
The Bank Nifty, however, failed to perform in line with benchmarks as the index fell 348 points to 47,492 and formed a bearish candlestick pattern on the daily scale but still seems to be in the range of 47,000-48,000 area. On the weekly charts, the index has formed a bearish candlestick pattern with a long lower shadow but still held its previous week's low. The index was down 1.35 percent during the week.
"The Bank Nifty index managed to hold the key support level of 47,400. If the index fails to sustain above this support, it could witness further decline towards the 47,100 levels," Kunal Shah, senior technical & derivative analyst at LKP Securities said.
On the upside, he feels the immediate resistance is at 47,700, and a breakout above this level may trigger short-covering, pushing the index higher toward 48,000-48,200 levels.
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