The Nifty 50 rebounded sharply from the day’s low to close moderately in the green but continued the lower high-lower low formation on March 11. The index faced strong resistance near 22,700 for the third consecutive week now (which coincides with the 20-day EMA), signaling a key level for further upward movement toward 23,000. However, as long as it stays below 22,700, consolidation may continue with support at 22,300-22,250. The Bank Nifty needs to defend 47,700 in the upcoming session, as breaking below it could bring more selling pressure. However, holding this level could raise the chance of a rebound above 48,000, experts said.

On Tuesday, March 11, the Nifty 50 rose by 38 points to 22,498, while the Bank Nifty declined by 363 points to close at 47,854. The market breadth remains weak, as about 1,783 shares saw a correction, against 856 shares that gained on the NSE.

Nifty Outlook and Strategy

Preeti K Chabra, Founder, Trade Delta

In the previous week, the Nifty index took support at the 100 EMA on the weekly chart. As expected, Nifty bounced last week from the low of 21,964, as the RSI was in the oversold zone, with the lower end of the Bollinger band acting as a strong support area. However, the positive momentum built in Nifty over the last week was sold off on Monday in the resistance zone of 22,666. Nifty has been struggling to cross this level, as we have seen selling in this zone multiple times. On the Bollinger band, the middle band, trading around 22,666, is heading downward, suggesting a downtrend. Furthermore, in the options chain, we see unwinding happening in the in-the-money (ITM) Puts, suggesting a bearish scenario.

Going forward this week, we see 22,666 as a strong resistance area and advise traders to sell Nifty Futures in this zone, adopting a sell-on-rise view.

Key Resistance: 22,666, 22,777

Key Support: 22,240, 22,000

Strategy: Sell Nifty Futures with the cash market giving rejection around 22,666 for a target of 22,300, with a stop-loss of 22,777.

Nagaraj Shetti, Senior Research Analyst at HDFC Securities

After showing weakness near the hurdle of 22,700 levels on Monday, Nifty witnessed a smart upside recovery from the lows on Tuesday and closed the day on a positive note. The opening downside gap has been completely filled. A long bull candle was formed on the daily chart, signaling the formation of a bullish 'meeting line' type candle pattern after a small decline. A similar candle pattern was formed on March 4, followed by a reasonable bounce in the market. Hence, this is a positive indication, and further upside from here could confirm the reversal pattern.

After the negative chart pattern of lower tops and bottoms over the last few weeks, Nifty is now in the process of forming a new higher bottom at 22,300 levels. A decisive UPmove above the hurdle of 22,700-22,800 levels could confirm the bullish shift, opening more upside in the near term. Immediate support is placed at 22,315 levels.

Key Resistance: 22,670, 22,800

Key Support: 22,315, 21,965

Strategy: Buy Nifty Futures near 22,400, with a stop-loss of 22,200, targeting 22,700.

Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors

Nifty managed to stay in positive territory despite a gap-down opening and closed above the important resistance of 22,490, which is a positive sign. On the daily chart, Nifty has not given a close below the prior day’s low in the past 6 trading sessions, suggesting that upside momentum is building up with each passing day. Prices have retraced 38.2% of the recent fall that began on February 5. We expect it to retrace 50% of it, which comes near 22,880 levels once Nifty breaches above 22,670 levels.

On the daily chart, prices are now approaching the mid-Bollinger Band. A decisive breakout of this band, which is near 22,670, can result in a fresh rise in the index. Additionally, the MACD (Moving Average Convergence Divergence) has just shown a bullish crossover, which is a positive signal. In summary, Nifty’s trend continues to remain positive. In the short term, if Nifty breaches above 22,550, it can push prices higher toward 22,670, followed by the final target of 22,880. On the downside, 22,300 is an important support level. As long as the price holds above this level, overall sentiment looks to be on the positive side.

Key Resistance: 22,880

Key Support: 22,300

Strategy: Long positions can be created above 22,550 with 22,430 as a stop-loss and targets of 22,670, followed by 22,790.

Bank Nifty - Outlook and Positioning

Preeti K Chabra, Founder, Trade Delta

With IndusInd Bank's derivative discrepancies rattling investor sentiment, Bank Nifty failed to defend the important psychological level of 48,000 and closed at 47,853 on Tuesday, its lowest closing since January 13 when it closed at 48,041. It made a fresh low of 47,702 on Tuesday but managed to close above the previous support zone of 47,840. On the weekly chart, Bank Nifty has been forming a lower-high-lower-low sequence for 6 weeks and is trading in a downward trending channel. On the monthly chart, this marks the 4th consecutive month where Bank Nifty has been heading downward on a closing basis, showcasing the strength of bears over bulls.

On the daily chart, Bank Nifty has closed below the important Fibonacci level of 48,078, which is now acting as a strong resistance area. It is trading with a Relative Strength Index (RSI) of 35.17, the zone where it has previously taken support and bounced. Furthermore, in the options chain, we see unwinding happening in the in-the-money (ITM) monthly Puts, suggesting a negative trend. Thus, we advise traders to adopt a sell-on-rise view for Bank Nifty.

Key Resistance: 48,041, 48,374

Key Support: 47,700, 47,500

Strategy: Sell Bank Nifty futures with the cash market giving rejection around 48,000 for a target of 47,700, with a strict stop-loss of a close above 48,250 on the hourly chart.

Nagaraj Shetti, Senior Research Analyst at HDFC Securities

Bank Nifty registered weakness for the third consecutive session on Tuesday and closed lower. A small green candle was formed on the daily chart after a gap-down opening with upper and lower shadows. This action could be considered as the formation of a Doji-type candle pattern (not a classical one). The immediate support of 47,800 was held, after violating it on the downside during intraday. The short-term trend of Bank Nifty remains weak with rangebound action. Given that it is placed at support and a Doji formation is present on the daily chart, there are chances of an upside bounce in the index in the coming sessions.

Key Resistance: 48,125, 48,840

Key Support: 47,600, 47,050

Strategy: Buy Bank Nifty Futures above 48,150, with a stop-loss of 47,850, targeting 48,700.

Ashish Kyal, CMT, Founder and CEO of Waves Strategy Advisors

For the past 11 sessions, Bank Nifty has been trading within a broader range of 47,840-48,730. In the previous week, prices faced resistance at the 48,730 level and reversed on the downside. In the previous session, Bank Nifty witnessed a gap-down opening of more than 300 points due to negative global cues, and prices remained under pressure throughout the session, primarily due to the sharp fall in IndusInd Bank after news about discrepancies in its derivatives portfolio. During the day, prices broke below the 47,840 level but failed to close below it, ending the session at 47,853 levels. Overall, the index is trading at an important price action area of 47,840. Previously, prices made multiple failed attempts to breach below it on a closing basis. So, the price action in the next few days will be important, as it will help clear the bigger picture.

In summary, Bank Nifty is at a crucial juncture. A break below 47,700 can accelerate further selling pressure, potentially dragging the price lower toward 47,450. Conversely, a breach above 48,150 can result in a short-term pullback.

Key Resistance: 48,730

Key Support: 47,200

Strategy: Short positions in Bank Nifty Futures can be created below 47,700 with targets of 47,450, followed by 47,200, and a stop-loss of 47,950 levels.