Technical View: 22,400 crucial for Nifty to move higher, volatility cools down further

Next further uptrend depends largely on 22,400

The Nifty extended gains for a third straight session to end at a new closing high in a special trading session on March 2,  aided by gains in metals and a drop in volatility.

The 50-share index hit a new all-time high of 22,420 before closing 0.18 percent higher at 22,378.4 after an under two-hour session, which was held to test the exchanges’ disaster recovery site in case of an emergence or a technical glitch.

The index consolidated throughout the session with a positive bias but formed a bearish candlestick pattern on the daily charts as the closing was lower than opening levels.

Overall momentum remains positive and the 22,400 is expected to be crucial for the index to move towards 22,600, the key resistance area. Immediate support is at 22,200, experts said.

"Although the overall sentiment remains positive, the index must surpass the 22,400 mark to trigger a new rally ," Rupak De, senior technical analyst, LKP Securities said.

The momentum indicator relative strength index is firmly trading at 62, indicating a balanced market.

Bank Nifty

Bank Nifty stayed above 47,000 and also at 47,297.50, up 10.6 points, forming a bearish candlestick pattern.

"A critical resistance level remains at 47,800 for next week, if broken, might initiate a next upside rally. The volume profile analysis identified 46,200 as a strong support level for the upcoming trading sessions," Om Mehra, technical analyst at SAMCO Securities said.

Volatility cooled down below 15 mark, giving more comfort to bulls. India VIX, the fear index, fell by 1.59 percent to 14.99 from 15.24.

The broader markets outperformed the benchmark, as Nifty midcap 100 and smallcap 100 indices gained 0.6 percent each.

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