The options data indicated that 22,000 is expected to be crucial for further direction in the Nifty 50, with immediate support at 21,900, and resistance at 22,100-22,200 levels.
The Nifty 50 ended with moderate gains on February 29 led by strength in late trade amid volatility throughout the session, which marked the monthly expiry of February derivative contacts. The index defended not only 21-day EMA (exponential moving average placed at 21,950) but also long upward sloping support trendline.
Hence, experts see possibly the index extending its upward move towards 22,100-22,200 in the coming sessions, with key support at 21,850 level.
The Nifty 50 remained volatile in the range of 21,860-22,000 and saw spurt in late trade. The index rose 32 points to 21,983 and formed bullish candlestick pattern with long upper and lower shadows, which resembles High Wave kind of pattern on the daily charts, signaling ongoing high volatility at the lows.
"Formation of such pattern after few sessions of decline indicates possible comeback of bulls from the lows," said Nagaraj Shetti, senior technical research analyst at HDFC Securities.
The positive chart pattern like higher tops and bottoms remains intact on the daily chart and currently Nifty is in the process of forming new higher bottom of the sequence. "Confirmation by sustainable upside bounce in the subsequent session is required to call this market action as a short-term higher bottom reversal pattern," said Nagaraj
The above options data indicated that 22,000 is expected to be crucial for further direction in the Nifty 50, with immediate support at 21,900, and resistance at 22,100-22,200 levels.
Bank Nifty
The Bank Nifty also turned volatile during the day and rebounded to close 158 points higher at 46,121, after more than 1 percent correction in previous session. The banking index has formed bullish candlestick pattern with upper and lower shadows on the daily scale.
The Bank Nifty bulls displayed strength by defending the crucial support level of 46,000, resulting in a close above it and signaling active bullish activity at lower levels.
"Nonetheless, the index is currently encountering significant resistance at 46,500, and a decisive breach above this level is anticipated to trigger additional short-covering, potentially pushing the index towards the 47,000 mark," said Kunal Shah, senior technical & derivative analyst at LKP Securities.
The confirmation of a bottom formation in the index would require sustained trading above 46,000 over several sessions, he feels.