Technical View: Nifty forms Doji pattern again, needs to close firmly above 22,500 for strong uptrend

22,500 remains crucial for further uptrend in Nifty

The Nifty 50 snapped three-day gains, but cut down losses in the last hour of trade and closed the volatile session moderately lower on April 2. The index continued to face resistance at 22,500, hence unless and until it gives strong closing above the same, the sharp uptrend is unlikely in near term, while the immediate support remains at 22,300-22,200 and as long as it holds the same, the overall trend remains positive, experts said.

The Nifty 50 opened flat at 22,459 and climbed up to 22,498, but immediately turned lower to hit a day's low of 22,388 in afternoon. The index saw some recovery in the last hour of trade and finally closed at 22,453, down 9 points.

The index has formed Doji candlestick pattern on the daily charts for yet another session, as the closing was near opening levels, indicating the tug-of-war between bulls and bears for future market trend.

"Though, Nifty placed at the crucial overhead resistance around 22,500 levels, still there is no confirmation of any reversal pattern unfolding at the highs. A decisive move above the hurdle of 22,500-22,600 levels could open more upside in the near term," said Nagaraj Shetti, senior technical research analyst at HDFC Securities.

Immediate support is at 22,350 level, he added.

The options data also indicated that the Nifty is likely to face hurdle at 22,500-22,600 levels on the higher side, with support at 22,300-22,200 levels.

As per the weekly options data, the maximum Call open interest remained at 22,500 strike, followed by 23,000 strike and 22,600 strike, with meaningful Call writing at 23,000 strike, then 22,500 and 22,600 strikes. On the Put side, the 22,000 strike owned the maximum open interest, followed by 22,300 strike and 22,200 strike, with writing at 21,900 strike, then 22,000 and 22,100 strikes.

The Bank Nifty also traded lower for the first time in last four consecutive sessions, down 33 points at 47,545, but defended 47,500 on closing basis. The current small reversal seems to be on expected lines given the recent run up, while the overall trend remains positive, experts said.

The Bank Nifty index maintained a narrow consolidation pattern ahead of the RBI policy meeting.

"With downside support at 47,000 and upside resistance at 48,000, a breakout in either direction could trigger significant market moves," Kunal Shah, senior technical & derivative analyst at LKP Securities said.

Despite the consolidation, the overall sentiment remains bullish, suggesting that dips should be seen as buying opportunities, especially with immediate support around the 47,400-47,350 zone, he added.