NIFTY OUTLOOK & TRADING FOR 16 FEB 2022

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It was more of a recovery rally after markets has been on a down curve for the past few sessions. The recovery came despite mixed cues in the Asian pack. However, lingering concerns such as geopolitical tensions, US interest rate hikes and rising inflation could keep investors on edge and markets could remain volatile. After the two days, the carnage market finally caught its breath as after a positive open and an index showing strength throughout the session level, the session closed at the 17352 level with a gain of 509 points. While Bank Nifty ended the session at 38170 for a gain of 1261 points.  Markets rebounded strongly after yesterday's sell-off, gaining nearly 3%. After the initial bullish trend, the benchmark fell for the first hour, but news that some of Russia's troops are being withdrawn from the border with Ukraine lifted sentiment throughout the day. The rally was largely driven by healthy buying in sectors such as auto, IT and bank stocks.

The markets have been on a roller coaster ride and we expect this to continue in the near future. In the absence of major domestic events, updates related to Russia-Ukraine tensions and their impact on global markets will be on the radar. We suggest limiting leveraged positions and waiting for markets to stabilize. On the daily charts, the Nifty has formed long bullish candles that indicate a continuation of a pullback rally in the near future. However, in the short-term, the market is still holding a lower top formation and is trading below the 50-day SMA, which is largely negative for the index. For Nifty, 17400 and 17500 would be the immediate hurdle. As long as the index trades above 17300, the uptrend texture will continue to the 17350-17450 levels. On the downside, if the index trades below 17300, a quick intraday correction is not ruled out. Below that, it could hit the 17200-17100 level. On a daily chart, the index has taken support from 200 DMA and a lower band from Bollinger and formed a large bullish candle that covered the previous gap indicating strength. On an hourly chart, the index has closed above 21*50-HMA with the positive crossover, indicating bullish momentum for the next session. Additionally, the daily momentum indicator Stochastic & MACD is also trading with a positive crossover, giving strength to prices. Currently the index has support at 16800 while resistance is at 17500. On the upside, Bank Nifty has support at 37200 levels

Resistance: 17350, 17425, 17575

Support: 17200, 17000, 16800