The Nifty closed 159 points higher at 17,930 on February 14, recovering the losses of the previous two sessions, with banking & financial services, FMCG, technology, metal stocks and Reliance Industries supporting the rally.
After opening higher at 17,840, the index managed to sustain above the crucial 17,800 level throughout the session. The index hit an intraday high of 17,955 in the afternoon and finally settled above 17,900 for the first time since January 24.
The index formed a bullish candle on the daily charts, making higher highs, higher lows.
The index touched not only the 50-day exponential moving average (EMA) of 17,960 but also the downward-sloping resistance trendline adjoining major swing highs (record high December 1, 2022 and January 24, 2023), which coincided.
The data indicated that if the index decisively surpasses the 50-day EMA, the psychologically vital 18,000 mark as well as the earlier swing high of 18,200 is possible in the coming sessions, experts said.
“We are of the view that if the index is trading above 17,800, the reversal formation is likely to continue,” Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities said.
Above it, the index could move to 18,050-18,100, he said. On the flip side, below 17,800, the uptrend will be vulnerable and the market can retest 17,700, he said.
On the options front, the maximum Call open interest was at 18,200 strike, followed by 18,000 and 18,100 strikes, which can be crucial resistance levels for the coming sessions, with maximum Call writing at 18,200 strike.
On the Put side, the maximum open interest was seen at 17,800 strike, which can be support level for the Nifty50 in coming sessions, followed by 17,900 & 17,700 strikes, with writing at 17,900 strike and 17,800 strikes.
With the confidence among bulls, the expected trading range for the index shifted higher to 17,750-18,200 from 17,650-18,000.
The India VIX fell 1.66 percent from 13.68 to 13.45.
The Bank Nifty opened on a positive note at 41,410 but failed to hold its gains and drifted lower to the day’s low of 41,196 in the initial hour. It, however, formed a strong base near 41,200-41,250 on the hourly scale and extended the upmove towards 41,700.
The index closed 366 points higher at 41,648 and formed a bullish candle on the daily scale as buying was visible at lower zones.
“The index is trading in between 41,100 and 41,750 from the past seven sessions and now it has to hold above 41,500 to make an up move towards 42,000 and 42,250 levels, while on the downside support is expected at 41,500 then 41,250 levels,” Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.