The Nifty gained rise more than 300 points on March 16, driven by positive global cues, rally across sectors and a drop in volatility. It recouped the previous day’s losses but still closed below its 200-day moving average, which is placed around 16,990 levels.
The index opened gap up at 16,877, moved higher to hit the day’s high of 16,988 before ending the session 312 points up at 16,975.
It a bullish candle on the daily chart as the closing was higher than the opening level. Now 17,000 would be the level to watch and if the index decisively closes above it, then it can move towards 17,500, experts said.
India VIX, which measure volatility in the market, was down 9.77 percent to 24.11. “Volatility needs to cool down further to 22-20 zones for complete dominance of bulls in the market,” said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
Also read: Nifty, Sensex rebound into green. Four factors driving the market sentiment
“The intraday trading range remained 150 points. Hence, strength in the Nifty shall not be expected unless it closes above 17,000 levels,” said Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia.
If the Nifty slips below 16,837, it can attract some selling pressure intraday, he said.
The price behaviour in the last three sessions is hinting that 16,600 can be critical support in the near term. Therefore, dips will be a buying opportunity unless the Nifty closes below 16,600, Mohammad said.
Also read: Taking Stock | Market stages smart rebound; Nifty ends above 16,900 ahead of US Fed decision
If the Nifty closes 17,000, the initial target should be in the 17,450–17,550 zone, he said. For momentum traders, the best buying opportunity would arise with a close above 17,000.
The trading range for the coming sessions, as indicated by options data, moved higher to 16,500-17,350 from 16,350-17,000.
Maximum Call open interest was witnessed at 18,000 strike followed by 17,000 strike, which could be an immediate resistance for the Nifty50, while maximum Put open interest was seen at 16,000 strike followed by 16,500 strike, which could be crucial support in near term.
Call writing was seen at 17,000 strike then 17,200 strike, while marginal Put writing was seen at 16,000 strike then 16,800 strike.
Banking index
The Bank Nifty also opened gap up at 35,556 to hit the day’s high of 35,806. The index closed 726 points higher at 35,748.
Also read: Gainers & Losers: Five stocks that moved the most on March 16
The index, which formed a bullish candle on the daily scale, made higher highs, higher lows from the third session.
“It has to hold above 35,750 levels for an up move towards 36,000 and 36,250 levels, whereas support can be seen at 35,500 and 35,250 levels,” said Taparia.
Positive setup was seen in UltraTech Cement, Axis Bank, Hindalco Industries, Infosys, Tech Mahindra, IOC, Bajaj Auto and IndusInd Bank, while weakness was seen in Cipla, Divi’s Labs, Dr Reddy’s Laboratories, Maruti Suzuki, and Gujarat Gas.
The broader markets also traded strong with the Nifty Midcap 100 index rising 2 percent and the smallcap index 1.2 percent.
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