He feels the short-term trend remains weak, but the market is showing signs of higher bottom formation around 22,200 levels.
Immediate support is at 22,200 levels and the next overhead resistance is at 22,500 levels," he said.
The weekly options data indicated that 22,200 is the immediate support for the Nifty and then 22,000 mark, with resistance at 22,400-22,500 levels.
The banking index was relatively weak as the key heavyweights like HDFC Bank, ICICI Bank and IndusInd Bank showed weakness which dragged the Nifty also lower.
We expect the Bank Nifty also to recover over the next few trading sessions," Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas said.
Market Trend
The Nifty 50 closed the session on a flat note after witnessing volatility and formed small bullish candlestick pattern with minor upper and lower shadows, which resembles high wave kind of candlestick pattern on the daily charts.
Generally, the formation of such candlestick patterns after the downtrend indicates the possibility of some bounce back, but overall the trend remains negative and unless the index gives strong close above 22,500, the major upward move is unlikely in the market, while if the index gives decisive close below the lower end of upward rising channel, then selling pressure may extend towards 21,800 level, experts said.
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The Nifty 50 opened lower at 22,231 and fell up to 22,185. The index showed recovery in late morning deals but remained volatile for rest of the session and finally settled flat at 22,302.50.
Overall, the positive chart pattern like higher tops and bottoms is intact as per daily timeframe chart and presently the market is in an attempt of new higher bottom formation. "We need confirmation of upside bounce in subsequent sessions to consider this as a higher bottom reversal pattern," Nagaraj Shetti, Senior technical research analyst at HDFC Securities said.
He feels the short-term trend remains weak, but the market is showing signs of higher bottom formation around 22,200 levels. "Confirmation of reversal from here could open short-term upside bounce in the market. Immediate support is at 22,200 levels and the next overhead resistance is at 22,500 levels," he said.
The weekly options data indicated that 22,200 is the immediate support for the Nifty and then 22,000 mark, with resistance at 22,400-22,500 levels.
On the Call side, the maximum open interest was seen at 22,800 strike, followed by 22,500 and 22,700 strikes, with maximum writing at 22,800 strike, then 22,700 and 22,400 strikes, while on the Put side, the 22,000 strike owned the maximum open interest, followed by 22,200, 22,300, and 21,800 strikes, with maximum writing at 22,200 strike, then 22,100 and 22,000 strikes.
Bank Nifty
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The Bank Nifty remained under pressure for sixth consecutive session and continued lower highs formation for three days in a row. The index fell 264 points to 48,021 and formed small bearish candlestick pattern with upper and lower shadows on the daily charts.
The banking index was relatively weak as the key heavyweights like HDFC Bank, ICICI Bank and IndusInd Bank showed weakness which dragged the Nifty also lower.
"It has reached the 40-day moving average 47,900 which is likely to provide support and restrict further downside. We expect the Bank Nifty also to recover over the next few trading sessions," Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas said. "The immediate hurdle is placed at 48,600 – 49,200."
Meanwhile, the India VIX, the fear gauge, sustained uptrend for 10th consecutive session, rising 0.43 percent to 17.08, from 17.01 levels. It climbing from 10 to over 17 levels in 10 days put the bulls at uncomfortable position and unless & until it falls significantly, the stability and sharp market recovery is unlikely, experts said.
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