The Nifty 50 concluded another day marked by volatility, closing marginally lower on April 3. Continuing to grapple with resistance levels around 22,500-22,550 since last Thursday, market participants seem to be awaiting the outcome of the Monetary Policy Committee meeting scheduled for April 5. Analysts suggest that a decisive close above 22,550 could propel the index towards key levels at 22,700-22,800, while 22,300 is anticipated to offer immediate support for the Nifty50.
Opening lower, the Nifty 50 reached an intraday low of around 22,350 in the morning session. However, a rebound in the afternoon saw it touching a high of 22,521 before erasing those gains in the final hour of trade. The index settled at 22,435, down 19 points for the day.
On the daily charts, the Nifty formed a small bullish candlestick pattern with an upper shadow. This pattern typically indicates a range-bound movement near all-time highs. Additionally, the formation of higher tops and bottoms suggests a smaller degree positive pattern, reinforcing the near-term uptrend. According to Nagaraj Shetti, senior technical research analyst at HDFC Securities, any weakness observed from current levels could present a buying opportunity, with immediate support expected at 22,300. He believes that a decisive move above 22,550 could swiftly propel the Nifty towards the next crucial hurdle at 22,800 levels.
Options data suggests that the Nifty 50 faces a significant hurdle at the 22,500 level, with a close above it potentially propelling the index towards 22,700-22,800 levels. Conversely, the key support level to monitor is at 22,200.
Looking at weekly options, the maximum Call open interest is observed at the 22,500 strike, followed by 23,000 and 22,800 strikes. Call writing is notable at the 22,800 strike, as well as the 22,500 and 22,700 strikes. On the Put side, the 22,000 strike holds the maximum open interest, followed by the 22,100 and 22,200 strikes, with writing observed at the 22,000, 22,100, and 22,400 strikes.
Meanwhile, the Bank Nifty has sustained above the downward sloping resistance trendline for three consecutive sessions, forming a bullish candlestick pattern on the daily charts. The index demonstrated a strong recovery from its intraday low, closing above the 47,500 level at 47,624.
According to Chandan Taparia, senior vice president and analyst-derivatives at Motilal Oswal Financial Services, the banking index needs to maintain support above the 47,250 level to extend its upward momentum towards 48,000 and 48,250 levels. On the downside, support is expected at 47,250 and 47,000 zones.
Moreover, the volatility index, India VIX, continues to decline, reaching its lowest level since November 24, 2023, at 11.37, providing further support to the bullish sentiment.
Sources: moneycontol.com
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