The Nifty 50 had a consolidation and rangebound trading on March 7, after a healthy run-up seen in the previous couple of sessions. The index still defended the 5 and 10-day EMAs, while volume remained above average for the third consecutive session. According to experts, the short-term uptrend is still intact in the index as long as it holds 22,500. The next level to watch on the higher side will be the 22,750-22,800 zone, while the key support is placed at 22,250.
The Nifty 50 opened lower and traded in the range of 22,634-22,465, before closing the session at 22,553, up 8 points. The index formed a small bullish candlestick pattern with a reasonable upper shadow on the daily charts.
Technically, this market action signals a consolidation movement at the overhead resistance. The index still held above the bearish gap of February 28, which is positive.
"The underlying short-term trend of Nifty remains positive. A sharp move above the 22,750-22,800 levels is likely to bring bulls back into action," Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, said.
Any dips from here could find support around the 22,250 levels, according to him.
For the week, the index gained 1.93 percent and formed long bullish candle on the weekly timeframe.
As per the weekly derivative data, the maximum Call open interest was seen at the 23,100 strike, followed by the 22,800 and 23,000 strikes, with the maximum Call writing at the 22,800 strike, followed by the 23,100 and 23,000 strikes. On the Put side, the 22,300 strike holds the maximum open interest, followed by the 22,000 and 22,500 strikes, with the maximum Put writing at the 22,300 strike, and then the 22,000 and 22,600 strikes.
The above options data suggested that the Nifty may face resistance at 22,800, and support is placed at 22,300, which is expected to be the immediate range.
Bank Nifty
The Bank Nifty snapped a three-day winning streak, falling 130 points to 48,498, and formed a small bullish candlestick pattern with a long upper shadow on the daily charts, indicating pressure at higher levels.
"While bulls remain in control, a decisive close above 48,600 (10-day EMA) is crucial for sustained upside momentum. If cleared, the index could rally towards 49,200 in the near term," Anshul Jain, Head of Research at Lakshmishree Investments, said.
On the downside, according to him, the support is placed at 48,300, and any dip towards this level presents a buying opportunity for traders. With bullish sentiment intact, traders should watch for a breakout above 48,600 to confirm strength and trigger the next leg of the rally, he advised.
Meanwhile, the India VIX, the fear index, remained supportive for bulls as it sustained below all key moving averages and dropped by 1.86 percent to 13.47 levels on Friday.
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