What to expect from today’s special trading session? Check Nifty outlook, near-term target

The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are holding a special live trading session on March 2 to assess the preparedness of their disaster recovery systems. Markets are usually closed on Saturdays.

A day earlier, the benchmark indices ended the session on record highs, with the Nifty surging more than 1.6 percent to close at 22,339.

The Nifty, which found support at around 21,850, broke out of the recent consolidation range. Despite the bulls taking charge, there is a negative divergence on the RSI momentum indicator, indicating caution against taking aggressive bets. Here is what analysts have to say:

Nifty outlook

According to SAMCO Securities, heavy put writing was observed at 22,000, 22,100 and 22,200 strikes. The Nifty had been facing strong resistance around the 22,250 levels since February 21.

“Finally, the put writers dethroned the call writers from the 22,200 strike, leading to a sharp upside move. The 22,300 strike also witnessed significant put writing. However, call writers have sizable positions at this strike, and hence, the option activity at the 22,300 strike will provide cues about Nifty’s future direction,” Samco Securities analysts said.

Nifty target above 22,600; support at 22,200

Shrey Jain, Founder and CEO discount broker SAS Online, said the special live trading session holds significance, with the Nifty’s projected target aligned at 22,640, with 22,200 as a robust support level.

“Any retracement towards this support zone is perceived as an opportune moment for buyers,” Jain said.

Rajesh Bhosale, Technical Analyst at Angel One, recommends adopting a “Buy on dip” strategy and focusing on individual stocks that will yield better returns

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“Key levels to monitor would be 22,250 and 22,150 as immediate support levels. Additionally, the level of 21,850 has gained significant support after being defended for two consecutive Thursdays, suggesting that any major weakness would likely only occur if this level is breached,” said Bhosale.

Caution for investors: Avoid aggressive long bets

He expects resistance in the 22,500-22,630 range. “On the other hand, with the markets trading in uncharted territory, identifying key resistance levels becomes challenging. However, considering reciprocal retracements, levels around 22,500 and 22,630 are viewed as immediate resistance,” said Bhosale.

On the indicators front, Bhosale said while prices are reaching new highs, the momentum indicator RSI smoothed isn’t following suit, indicating a “negative divergence”. This serves as a warning to traders, suggesting caution and advising against aggressive bets.

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