Bulls May Lose Vigor Near 26,000; Support at 25,200: Analysts
ETMarkets.com reports that current market dynamics indicate a cautious approach for bulls as they may encounter challenges near the 26,000 threshold. Here’s a detailed look at where Nifty is expected to head in the coming days, along with crucial trading strategies.
Nifty’s Expected Range and Key Levels
– Current Indicators: A breakout above the 2,180–2,190 levels indicates accumulation, and the RSI suggests there is room for further upside.
– Support Levels: The 25,200–25,300 zone is anticipated to serve as critical support, especially amid ongoing geopolitical uncertainties.
– Resistance Levels: Analysts expect that gains will be limited around 25,650–26,000 levels until a decisive breakout occurs.
Insights from Analysts on Nifty’s Trajectory
Sameet Chavan, Head – Research (Technical & Derivatives), Angel One
– Current Position: Nifty has maintained the critical psychological mark of 25,000. A downward trendline is noted around 25,850–25,900.
– Future Outlook: Traders should wait for a definitive breakout above these levels on a closing basis to encourage movement towards the 26,200–26,400 range.
– Support Levels: The 200-SMA level at 25,300 is a significant support point, with the vital threshold at 25,000.
Recommended Trading Strategies
– Bullish Approach: Considering recent behavior, a “Bull Call Spread” strategy is advisable for the March 2 expiry.
– Execution: Buy 1 lot of ATM 25,600 CE at Rs 221, and sell 1 lot of OTM 26,000 CE at Rs 65, resulting in a net outflow of Rs 156 (221–65).
– Potential Outcomes: The break-even point stands at 25,756, with a max profit potential of Rs 244 (26,400–26,200–156), translating to Rs 15,860.
Market Dynamics and Future Projections
Dharmesh Shah, Vice President & Head of Technicals, ICICI Securities
– Market Correction: The Nifty has recently retraced 50% of its two-session rally from February, indicating a healthy consolidation phase.
– Support Levels: Strong support is identified at 25,200, with increased market breadth suggesting potential for a broader rally.
Weekly Stock Recommendations
1. Bajaj Finance
– CMP: Rs 1,030
– Stop Loss: Rs 984
– Target: Rs 1,089
– Insight: Stock shows promising movement post consolidation.
2. Dixon Technologies
– CMP: Rs 11,072
– Stop Loss: Rs 10,400
– Target: Rs 12,200
– Insight: A ‘Morning Star’ pattern may initiate a strong rally upon surpassing Rs 11,900.
3. Bharat Electronics
– CMP: Rs 441
– Stop Loss: Rs 398
– Target: Rs 484
– Insight: Fresh all-time highs indicate strong buying momentum.
4. Tata Steel
– CMP: Rs 208
– Stop Loss: Rs 190
– Target: Rs 228
– Insight: Demonstrates a robust bullish setup with consistent support near the 50-week EMA.
5. Navin Fluorine
– CMP: Rs 6,526
– Stop Loss: Rs 6,190
– Target: Rs 7,190
– Insight: Indicates strong near-term strength and healthy momentum.
Conclusion: Nifty’s Key Support and Resistance
As analysts point out, while bulls may lose vigor near the 26,000 level, the Nifty’s crucial support at 25,200 must hold for any potential recovery. Monitoring these pivotal levels will be essential for traders looking to capitalize on market movements in the coming week. Utilizing defined trading strategies will help navigate the current landscape effectively.