If the Nifty holds above 12100, then a bounce towards 12,200 and 12,300 could be seen, experts say.
The Nifty snapped a four-day losing streak to bounce back on February 19 amid receding coronavirus cases and ahead of a Cabinet meeting.
Positive global cues helped the index close above 12,100, forming a bullish candle on the daily chart. The index ended 138 points, or 1.2%, higher at 12,130.30.
"This upswing is not backed by a buy signal on any of the momentum oscillators on daily charts, which can be a cause for concern as it is still trading below its 50-day exponential moving average (12140). Hence, initially, it needs to get past and sustain above 12,178 levels and in such a scenario we can eventually expect the recent highs of 12,246 levels to be taken off," said Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory.
"The traders can make use of dips to create fresh longs with a stop below 12,030 levels on the closing basis and look for an initial target of 12,178. In case the Nifty closes below 12,030 levels, then it shall be considered as a weak sign, which should ideally resume the downswing," he said.
If the Nifty holds above 12100, then a bounce towards 12,200 and then 12,300 could be seen, experts say.
The options data indicates the trading range to between 11,900 and 12,250 zones.
On the options front, maximum Put open interest (OI) is at 12,000 followed by 11,800 strike while maximum Call OI is at 12,300 followed by 12,500 strike.
India VIX fell by 3.36% at 14.02 levels.
The Bank Nifty opened with a decent upside gap on the back of the gap-up opening in Kotak Bank but failed to sustain at higher levels and corrected in the initial hour of trade.
"It formed a small-bodied candle with long lower shadow, which indicates that dips got bought into. Now, if the Bank Nifty manages to hold 30,600, then we may an up move towards 31,100 then 31,350 levels. While strong support is now shifting to 30,600 and then 30,250 levels," said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited.Exclusive offer: Use code "BUDGET2020" and get Moneycontrol Pro's Subscription for as little as Rs 333/- for the first year.
