February 28, 2024

For the Nifty, the short-term trend remains weak.

The Nifty ended with losses for the third session in a row on January 18 despite making a smart recovery from the day’s lows amid selling in banking & financial services, technology, metal and FMCG names.

The index opened lower at 21,414 on weak global cues and widened losses to hit the day’s low of 21,286. It immediately rebounded from the day’s low but failed to capitalise on the gains and closed 110 points down at 21,462.

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It formed a high wave candlestick pattern on the daily charts, indicating high volatility in the market.

The trend remains in favour of bears but in case of a rebound, the Nifty may face resistance at 21,550 followed by 21,700. The day’s low can act as a support for the index, experts said.

“After showing a reasonable weakness from new highs (22,124), the formation of a High Wave at the lows calls for an upside bounce in the market,” Nagaraj Shetti, senior technical research analyst, HDFC Securities, said.

The short-term trend remains weak. “Having declined sharply, there is a possibility of pull back rally in the immediate short term, which is expected to be a sell-on-rise opportunity.

Resistance is at 21,700-21,800. On the lower side, supports is at 21,200-21,000, he said.

According to Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas, 21,550 – 21,570 is the immediate hurdle, while 21,350 – 21,300 is the crucial support.

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On the options front, the maximum Call open interest was seen at 22,000 strike followed by 22,500 strike & 21,800 strike, with Call writing at 22,500 strike, then 21,500 strike.

On the Put side, the 20,500 strike owned the maximum open interest, followed by 21,000 strike, with writing at 21,400 strike, then 20,200 strike.

The data indicates that the Nifty may face resistance in the range of 21,500-21,800, with immediate support at 21,400 and then 21,000.

Bank Nifty

Bank Nifty also maintained its downtrend, falling 351 points to 45,714, though it recovered around 280 points from the day’s low.

The index formed a bullish candlestick pattern with a long upper shadow on the daily charts, as the closing was higher than the opening levels.

Bank Nifty reached the 161.82 percent Fibonacci extension level of 45,768, which also coincides with the 20-week moving average, making the 45,800–45,600 a crucial support zone. As long as the index stays above it, recovery will continue, Jatin Gedia of Sharekhan by BNP Paribas said.

On the upside, the index can face resistance at 46,400 -46,600.

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