Technical View | Nifty forms long bullish candle, smart recovery raises hope for 22,000 mark

The Nifty 50 showed smart recovery in later part of session after a disappointing start, and reached near the crucial resistance of 21,850 on February 14. Given the strength in bulls camp, the index may march towards 22,000-22,100 area in the coming sessions provided it climbs and holds 21,850 level, while 21,500 is expected to be key support going ahead, experts said.

The Nifty 50 opened more than 200 points down, tracking weak global cues amid concerns over possible delay in rate cut by US Fed post higher-than-expected inflation. However, as the day progressed, the index started getting support from bulls and finally turned green in the last hour of trade.

The index settled at 21,840, up 97 points and formed long bullish candlestick pattern, which engulfed all the previous three candles. The index not only defended 21,500 mark, but also the upward sloping support trendline on the closing basis, raising hopes for further upward move.

"Sustained positive momentum, without significant global escalations, could lead Nifty to retest levels of 22,000 - 22,100. However, a strong upward trend would require surpassing 22,100 to initiate a fresh upside," said Rajesh Bhosale, a technical analyst at Angel One.

He feels support levels have shifted higher, with immediate support around 21,650, and 21,500 has gained significant credibility as a support level. A sharp sell-off would only occur if these support levels are breached, he said.

The options data also indicated that 22,000 is expected to be next key resistance area for the Nifty 50, with support at 21,600-21,500 levels.

On the Call side, the maximum open interest was visible at 22,000 strike, followed by 22,200 strike and 22,100 strike, with writing at 22,100 strike, then 22,000 & 22,200 strikes, while on the Put front, the 21,000 strike owned the maximum open interest, followed by 21,600 strike, and 21,500 strike, with writing at 21,600 strike, then 21,300 strike.

Bank Nifty

The Bank Nifty extended upward journey for yet another session and continued to defend the upward sloping support trendline, indicating the positive vibes in the counter. The banking index gained 406 points at 45,908 and formed long bullish candlestick pattern on the daily timeframe.

The Bank Nifty successfully defended the crucial support at 45,000.

"The index is firmly in a buy mode, with immediate support at 45,500 acting as a cushion for the bulls. The index is indicating an immediate target of 46,500, and if it sustains above this level, further upside towards the 48,000 mark can be anticipated," said Kunal Shah, senior technical & derivative analyst at LKP Securities.

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