The Nifty made a strong start to the April series as well as FY25, hitting a new record high of 22,530 on April 1 even as volatility fell to a three-and-half-month low.
The index ended the session 135 points higher at 22,462 and formed a Doji candlestick on the daily charts, as the closing was near the opening levels. A Doji pattern indicates indecisiveness among bulls and bears about future market trends.
"The Nifty has been witnessing a sharp upmove since the past couple of trading sessions and we expect the momentum to continue," Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas said.
The hourly momentum indicator triggered a negative crossover, which can lead to consolidation and a dip towards 22,400– 22,350. It should be used as a buying opportunity, as the overall trend appears positive, he said.
If the 50-stock index manages to hold above 22,500, it can rise further to 22,670–22,740.
On the Call side, the 22,500 strike owned the maximum open interest, followed by 23,000 and 22,700 strikes, with meaningful writing at similar strikes in a similar sequence.
On the Put side, the maximum open interest was visible at 22,300 strike, followed by 22,000 and 22,200 strikes, with writing at 22,500 strike, then 22,300 and 21,800 strikes.
The data indicates that the Nifty is likely to hit the 23,000 mark in the April series, with immediate resistance at 22,700 and support at 22,300-22,200.
Bank Nifty
Bank Nifty ended higher a day ahead of the beginning of the three-day RBI monetary policy meeting. It closed 454 points higher at 47,578.
The banking index formed a bullish candlestick pattern on the daily chart but volumes were lower than average.
The index may face immediate resistance at 47,800-48,000. If it decisively goes past 48,000, the index can hit a new high, with key support at 47,000.
"With lower-end support around the 47,000-46,800 zone, any retracement towards this level presents a favourable opportunity for long positions," Kunal Shah, senior technical & derivative analyst, LKP Securities, said.
The next obstacle for Bank Nifty is at 48,000. After the RBI policy announcement, market direction and sentiment are expected to become clearer, he said.
The volatility dropped significantly, giving more comfort to bulls. The India VIX, the fear gauge, closed at 12.08, the lowest level since December 13, down 5.84 percent.
The broader markets recorded strong gains, with Nifty midcap 100 and smallcap 100 indices rising 1.7 percent and 3.3 percent, respectively, on strong breadth.
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