Nifty technical indicators show bullish sentiment amid strong volume; resistance at 22,250-22,300

The market sentiment has turned bullish as intraday dips were met with buying interest in the February 27 trading session, leading the Nifty to close just below the 22,200 mark with gains of 0.28 percent. The Nifty has now formed a bullish engulfing candlestick pattern and awaits fresh triggers to move towards the next crucial resistance zone of 22,320. Globally, investors would be watching out for the US and Europe Consumer Confidence Data.

India VIX showed a positive intraday movement of 0.82 percent and settled at 15.72. The index has a support zone around 22,050-22,000. On the derivatives front, Open Interest (OI) data suggests that the highest OI was observed on the call side at 22,500, followed by 22,600 strike prices. On the put side, the highest OI is at the 22,000 strike price.

How technical analysts see the market

“On the daily chart, the Nifty formed a bullish engulfing pattern with significant volume, indicating bullish sentiment in the market. If the price breaks the 22,250 level, it is anticipated to reach a new all-time high in the coming days,” said Mandar Bhojane, research analyst at Choice Broking.

“On the daily chart (excluding Thursday’s candle), prices appear to be trading within a narrow range, with 22,050 – 22,000 serving as a robust buying zone, while 22,250 – 22,300 acts as a hurdle. Traders seem to be awaiting a catalyst for a momentum shift, and the next significant movement will likely occur once this range of 22,000 – 22,300 is breached on a sustained closing basis. Until then, traders may opt to pursue a buy-on-dip strategy ahead of the monthly expiry,” said Rajesh Bhosale, Technical Analyst at Angel One.

Bhosale believes the primary focus remains on individual stocks, as some counters demonstrate strength in these lackluster markets. However, traders are advised to exercise caution and refrain from aggressive positions, given the negative divergence observed on key momentum indicators, which does not bode well for the broader market.

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Akshay Bhagwat, senior vice-president of derivative research at JM Financial, said: “PCR improved from 0.84 to 1.02 at an IV of 15.1 on an improvement in action in puts. 22,000, 22,100, 22,200 saw major OI addition in puts on the view that 22k should hold for monthly expiry. ATM 22,200 strike has an OI PCR of 0.7 hinting a positive stance. Overall, a neutral options matrix on the expected price band of 22,000-22,300.”

His day trading view sees support at 22,075/21,875 and Resistance at 22,300.

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