Technical View | Nifty forms large bullish candle, experts say 16,970 is the level to watch


The Nifty managed to go past 16,800 on March 14 after two days of consolidation and stiff resistance at 16,700-16,800, backed by banking & financials, auto and technology stocks. Positive global cues and cooling crude prices lifted the sentiment.

After opening flat at 16,634, the Nifty gained strength to hit an intraday high of 16,888. It closed at 16,871, up 241 points, or 1.45 percent, gaining more than 6 percent in five sessions.

The index formed a large bullish candle on the daily chart, as the closing was higher than the opening level. A decisive close above 16,800 indicates that the index may move towards 200-day simple moving average (16,970) in the coming sessions, experts said.

The volatility, however, inched up 1.33 percent to 25.67. It has to drop to around 20 for the markets to stabilise, experts said.

Also read: Taking Stock | Market extends winning streak for fifth day; IT, banks gain

“The Nifty50 registered a fresh breakout above its 37-day-old descending channel signalling a sustainable up move going forward,” said Mazhar Mohammad, Founder & Chief Market Strategist at ChartviewIndia.

It also registered a close above the 20-day simple moving average, which had curtailed all the pullback attempts since the January 2022 top of 18,350 levels, he said. Hence, “there is a bright chance, that the 200-day simple moving average, present around 16,970 levels, may not pose a bigger challenge for bulls.”

As long as the Nifty sustains above 16,600, one can look for much bigger targets with an initial move into the zone of 17,500–17,700, he said. Any dip can be a buying opportunity for positional traders, with a stop-loss below 16,600, he said.

Also read: Gainers & Losers: Five stocks that moved the most on March 14

The options data indicates that the Nifty could trade in a range of 16,500-17,200 in the coming sessions.

Maximum Call open interest was seen at 18,000 strike followed by 17,000 strike, while maximum Put open interest was seen at 16,000 strike followed by 16,500 strike.

Marginal Call writing was seen at 17,100 strike then 17,500 strike, while marginal Put writing was seen at 16,000 strike then 16,700 strike.

On the stocks front, Deepak Nitrite, Dixon Technologies, Mahanagar Gas, SRF, HDFC Bank, PI Industries, Cummins India, Balrampur Chini Mills, SBI, Infosys, Axis Bank, Bank of Baroda, PVR, Bata India, Kotak Mahindra Bank, Wipro, Titan Company, Cholamandalam Investment, Divi’s Labs, MCX, ITC and Reliance Industries saw a positive set up, said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.

Weakness was seen in HPCL, NALCO, SAIL, Indian Energy Exchange, Bharat Electronics, Petronet LNG, Motherson Sumi Systems, Muthoot Finance and HDFC Life.

Also read: Bajar Gupshup | Markets gains for 5th consecutive session; Banks & IT in the lead

Banking index

The Bank Nifty opened higher at 34,660 and hit the day’s high of 35,435. It outperformed the broader markets and closed 766 points higher at 35,312.

The index formed a bullish candle on the daily scale with follow-up buying activities.

“Now, it has to hold above 35,000 levels, for an up move towards 35,750 and 36,000 levels whereas support can be seen at 34,750 followed by 34,500,” said Taparia.

Broader markets underperformed the benchmarks and the Bank Nifty. The Nifty Midcap 100 and Smallcap 100 indices gained 0.2 percent each.

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