Technical View | Nifty forms Doji pattern on weekly, daily charts; needs to stay above 17,800 for upmove

The zone of 17,650-17,700 is likely to be the crucial support area for the index in the coming sessions

The Nifty remained range-bound in a choppy session and closed 37 points lower at 17,856 on February 10.

It formed a Doji pattern on the daily charts but smartly defended 17,800 for the third day in a row.

On the weekly basis, too, it ended above 17,800 for the second consecutive week. If it holds the level and manages to go past the 50-day exponential moving average (17,969), then there is a possibility of the index moving towards 18,000-18,200 in the coming week, experts said. The 17,650-17,700 zone is likely to be the crucial support area.

During the week, the index closed flat with a positive bias and formed inside body candle as well as a Doji pattern on the weekly scale, indicating indecisiveness among bulls and bears about the market trend.

“Technically, last week (ending February 10), the index took the support near 17,650 and reversed but it failed to close above 17,900, the important resistance mark. Currently, the Nifty is consolidating near the 20-day SMA (17,872) and it also formed inside the body candle on weekly charts,” Amol Athawale, Deputy Vice President-Technical Analyst at Kotak Securities said.

For traders, 17,900 would be the immediate breakout level to watch out for, above which the index can move to 18,200, he said.

A fresh selloff is possible if the index slips below 17,750 and the selling pressure can accelerate to 17,650-17,500.

On the options front, the maximum Call open interest was at 18,000 strike, followed by 18,500 strike & 17,900 strike, with maximum Call writing in 17,800 to 18,000 strikes.

On the Put side, the maximum open interest was at 17,800 strike, followed by 17,500 & 17,700 strikes, with writing at 17,800 strike, then 17,300-17,400 strikes. The data indicates that the Nifty can trade in the 17,400- 18200 range.

India VIX, the fear index fell, was down 2.26 percent at 12.75 level, aiding support-based buying during the week.

Banking index

The Bank Nifty opened marginally lower at 41,452 and moved in a narrow range of 200 points. The index has remained stuck between 41,100 and 41,750 for the past five sessions.

The index closed 5 points higher at 41,559 on February 10 and gained 60 points for the week.

It formed a small bullish candle on the daily scale and a Doji pattern on the weekly scale, which suggest the absence of follow-up on either side.

“Now it has to continue to hold above 41,500 level to make an up move towards 41,750 and 42,000 levels, whereas supports are expected at 41,250, then 41,000 level,” Shivangi Sarda, Senior Executive | Analyst at Motilal Oswal Financial Services, said.

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