Nifty holds above key averages; 26,000 next? Levels to watch today
Nifty price prediction Feb 4: Key support at 25,500, resistance near 26,200. Also read Bank Nifty outlook, Nifty options data, and Chandan Taparia stock picks
 "Nifty holds above key averages; 26,000 next? Levels to watch today")
Nifty price prediction, Feb 4
Nifty index opened with a sharp gap up of nearly 1,400 points on Tuesday, around the 26,300 zone, on the back of optimism surrounding the India–US trade deal. However, shortly after the opening, the index trimmed nearly half of its initial gains. This was followed by a sideways consolidation for the remainder of the session as the market digested the sharp up move.
Despite the intraday cooling, Nifty share price has recovered the losses of the last two weeks. Besides, the earlier resistance zone is now expected to act as a strong support area. On the daily chart, Nifty index has formed a negative candle but successfully negated the recent lower-low formation. Nifty price is now trading comfortably above all its short-term moving averages and closed the session with gains of around 600 points yesterday.
Now it has to hold above 25,500 for the strength to rebuild towards 26,000, followed by 26,200 zones. Supports have shifted higher at 25,500, followed by 25,300 zones.
Nifty options chain data
On the options front, Maximum Call OI is at 26,000, followed by 25,800 strike, while Maximum Put OI is at 25,000, followed by 25,500 strike. Call writing is seen at 26,000 and then at 25,800 strike, while Put writing is seen at 25,800 and then at 24,700 strike.
Option data suggests a broader trading range of 25,200 to 26,200 zones, while an immediate range lies between 25,500 to 26,000 levels.
Nifty Bank outlook
Bank Nifty index opened with a strong gap up and marked a new record high of 61,764 on Tuesday, February 3. However, a sharp profit booking was witnessed from higher levels, which dragged the index towards 59,800 zones in the initial part of the session.
Buying interest re-emerged from lower levels, leading to a bounce, but later the index traded in a narrow range of around 200 points. It ended the session with gains of 1,400 points. The Nifty Bank index has formed a bearish bodied candle on the daily scale with a slight upper and lower wicks. Now, till it holds above 59,750 zones, strength is likely to rebuild towards 60,500 and then 60,750 levels, while supports are shifting higher at 59,750, followed by 59,500.
Chandan Taparia stock picks, Feb 4
Buy BPCL | CMP: ₹374 | Stop Loss: ₹363 | Share price target: ₹395
BPCL share price has given a range breakout on the daily chart with higher than average traded volumes. The RSI momentum indicator has given a bullish crossover to confirm the upwards momentum.
Buy Torrent Pharma | CMP: ₹4,045 | Stop Loss: ₹3,915 | Share price target: ₹4,280
Torrent Pharma share price is in an overall uptrend and is respecting its 50-DEMA support zones with slight dips being bought into. The ADX line is rising which confirms the strength of the uptrend.
Buy UPL | CMP: ₹739 | Stop Loss: ₹720 | Share price target: ₹780
UPL share price has bounced up from its 200-DEMA support zones with a gap up on the daily chart. The MACD line has turned up to support the positive momentum.
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Disclaimer: This article is by Chandan Taparia, head of derivatives & technicals, wealth management, Motilal Oswal Financial Services. Views expressed are his own.