"Additionally, the momentum indicator RSI (relative strength index) is showing a bullish crossover, indicating positive momentum in the index value.
Over the short term, the index might remain strong with an upside potential ranging between 22,750-22,800," Rupak De, senior technical analyst at LKP Securities said.
The monthly options data indicated that the Nifty is likely to face strong resistance at 22,600 as passing of the same can it towards 22,800 mark, with key support at 22,000.
On the Call side, the maximum open interest was seen at 22,600 strike, followed by 22,500 and 22,800 strikes, with meaningful writing at similar strikes in similar sequence, while on the Put side, the 22,600 strike owned the maximum open interest, followed by 22,500 strike, and 22,000 strike, with writing at 22,600 strike, then 22,500 and 22,000 strike.
The broader markets also remained positive with the Nifty Midcap 100 and Smallcap 100 indices rising 0.5 percent and 0.8 percent, respectively.
Nifty uptrend
The Nifty 50 has seen a strong breakout after last three days of consolidation and climbed decisively above 22,500 on April 25, the expiry day for April futures & options contracts, raising hopes for a run towards record high placed between 22,750-22,800. If the mood remains positive in the May series, then 23,000 is expected to be the next level to watch, experts said, adding 22,300 will remain a crucial support for the expected rally.
On April 25, the Nifty 50 opened lower at 22,317 and after consolidation below 22,450 level (extending uptrend for fifth consecutive session), gained major strength in afternoon. Finally, it settled at 22,570, up 168 points and formed long bullish candlestick pattern on the daily charts, following a series of small candles in the past three sessions, suggesting meaningful buying activity during the day. In fact, the bull candle completely engulfed the previous couple of red candles.
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With today's rally, the index climbed above all key moving averages. "Additionally, the momentum indicator RSI (relative strength index) is showing a bullish crossover, indicating positive momentum in the index value. Over the short term, the index might remain strong with an upside potential ranging between 22,750-22,800," Rupak De, senior technical analyst at LKP Securities said.
On the lower end, the support is placed at 22,450, he feels.
The monthly options data indicated that the Nifty is likely to face strong resistance at 22,600 as passing of the same can it towards 22,800 mark, with key support at 22,000.
On the Call side, the maximum open interest was seen at 22,600 strike, followed by 22,500 and 22,800 strikes, with meaningful writing at similar strikes in similar sequence, while on the Put side, the 22,600 strike owned the maximum open interest, followed by 22,500 strike, and 22,000 strike, with writing at 22,600 strike, then 22,500 and 22,000 strike.
Bank Nifty
The Bank Nifty has also formed strong bullish candlestick pattern on the daily timeframe with healthy volumes, and now traded above all key moving averages, raising the possibility of the index moving past 49,000 mark soon.
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The banking index jumped 306 points to 48,495.
"Going ahead we expect the momentum to continue and minor degree pullbacks should be used as a buying opportunity," Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas said.
On the upside, he feels the next hurdle is placed at 49,000. Longs should be held with a trialing stop-loss at 48,200 which is the 20 hours moving average, he added.
The broader markets also remained positive with the Nifty Midcap 100 and Smallcap 100 indices rising 0.5 percent and 0.8 percent, respectively.
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