Technical View: Nifty aims for 22.300 as bulls gather strength, fear gauge reads lower

Nifty likely to face next resistance at 22,300

The Nifty 50 gained strength after the initial hour of weakness and closed higher for a third consecutive session on March 22, as all sectors, barring IT, supported the market. Given the ongoing momentum and further fall in volatility, the index may face next resistance at 22,300 which is crucial for further upmove towards a record high, with support 21,950 level, experts said.

The Nifty opened lower at 21,932 and fell up to 21,883 on March 22, but after initial volatility, the index rebounded and gained further strength as the day progressed to hit a day's high of 22,181. The index rose 85 points to 22,097 and formed a bullish candlestick pattern on the daily charts with above-average volumes.

"The market is facing strong resistance around 22,200-22,300 levels and a decisive break above this hurdle could open the next round of sharp upmove in the market," Nagaraj Shetti, senior technical research analyst at HDFC Securities said.

For the week, the index gained 0.33 percent and formed bullish candlestick pattern with long lower shadow on the weekly scale, indicating healthy buying interest at lower levels.

The weekly support of the 10-week EMA (exponential moving average) has been regained after the intra-week downside violation at 21,950. This is a positive indication, Nagaraj said.

Hence, he feels the short-term trend of Nifty remains positive. "A sharp move above the hurdle of 22,200-22,300 levels could pull Nifty towards new all-time highs around 22,550 levels. Immediate support is at 21,880 levels," he said.

On the monthly options front, the maximum Call open interest was seen at 23,000 strike, followed by 22,500 & 22,000 strikes, with meaningful Call writing at 22,500 strike, then 23,000 & 22,600 strikes. On the Put side, the 22,000 strike owned the maximum open interest, followed by 21,000 & 22,100 strikes, with writing at 22,100 strike, then 22,000 and 21,900 strikes.

The above options data indicated that the Nifty is expected to face resistance at 22,500 mark in coming sessions, with support at 21,900 level.

Bank Nifty

The Bank Nifty extended the uptrend for yet another session, rising 179 points to 46,864 and formed a bullish candlestick pattern on the daily charts. With Friday's uptrend, the banking index climbed above all key moving averages.

Overall, the Bank Nifty index saw robust buying from lower levels but struggled to breach the resistance at 47,000. "Immediate support lies at 46,600-46,500, and as long as the index holds above this level, the outlook remains bullish," Rupak De, senior technical analyst at LKP Securities said.

A breakthrough above 47,000 is anticipated to trigger sharp short-covering rallies towards the 48,000 mark, he feels.

For the week, the banking index gained 0.6 percent and formed a bullish candlestick pattern with long lower shadow on the weekly scale, while continuing lower highs, lower lows formation for the second consecutive week.

The volatility dropped further, giving more push to bulls, as India VIX was down 2.33 percent at 12.22, the lowest closing level since December 13, 2023.

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