Technical Analysis

WHAT LIES AHEAD : NEAR-TERM PICTURE [EasyDNNnews:PaidContentStart]

SPOT NIFTY : After forming back-to-back inde cisive candles, followed by a rever sal candle in the form of a hanging man like candle on Wednesday, the Nifty 50 index on Thursday formed an open high candle, which is bear ish. It closed below the two-day low. Volumes were higher on a declining day. As the decline in price was seen on the back of a surge in volume, the index has recorded a fresh distribu tion day. 

The index took support at the 8 EMA and the 50 DMA. The MACD histogram also shows a significant decline in momentum. The 14 peri od RSI failed to close above 60 and slipped below 55. The Mansfield Relative Strength line is now deci sively below its average, indicating underperformance. With the index closing at its previous three-day low, bullish strength appears to be waning. The declining ADX line is another indication of weakening trend strength. 

For now, 25,782 (50 DMA) and 25,751 (8 EMA) are strong support zones. A close below these levels would be negative, with the next major supports at the 100 EMA of 25,584 and the 20 DMA of 25,479. In any case, a move below the 20 DMA would be negative and could fill the February 3 gap area. The market is still trying to find direction. On the hourly chart, the RSI is on the verge of entering the bearish zone, while the MACD line is approaching the zero line. It is time to avoid fresh long positions. A close below the 8 EMA is likely to open up fresh shorting opportunities 

NIFTY DERIVATIVES: After settling at 25,642.80 last Thursday, Nifty continued its upward trajectory and closed today’s session at 25,807.20. The index maintained positive momentum throughout the week, extending gains after the recent recovery phase. On a weekly basis, Nifty advanced nearly 0.64 per cent, or 164.4 points. ATM Implied Volatility (IV) declined further from last week’s 9.99 to 8.79, indicating continued compression in volatility. India VIX also edged lower from 12.17 to 11.72, reflecting eas ing risk perception in the market. The Put-Call Ratio (PCR) for the upcoming weekly expiry has softened slightly from 0.648 to 0.6162, remaining in the oversold region for another week. For the coming weekly expiry, total call open interest stands at 27,25,659 contracts, while total put open interest is at 16,79,684 contracts. Among the call options, the 26,000 strike carries the highest open interest at 2,58,768 contracts, followed by the 27,000 with 2,16,035 and the 25,900 strike with open interest at 1,74,044 contracts, respectively. On the put side, the out-of-the-money strike 24,500 has the highest open interest at 1,31,655 contracts, followed by the 25,800 strike with 99,803 contracts and the 24,000 strike with 90,578 contracts. The Max Pain level for the upcoming expiry is posi tioned at 25,800. 

STOCK STRATEGY 

VOLTAS LTD. ...... BUY ...... CMP ₹1,528.35 

BSE Code ...... 500575              
Target 1 .... ₹1,600 
Target 2 .... ₹1,700
Stoploss ...₹1,458 (CLS) 

Current Observation: Voltas Limited has emerged as India’s largest air conditioning company and one of the lead ing engineering solutions providers. Voltas is a proud member of the globally renowned Tata Group, which operates in more than 100 countries across six conti nents. 

The stock has broken out of a 41-week Stage 1 consol idation and has transitioned into Stage 2. Volumes on Thursday were above average. Its Relative Strength Rating line is at 83, indicating outperformance. The stock closed above the 38.2 per cent retracement level of the prior fall and is comfortably placed above all key long-term and short-term averages. The Bollinger Bands are expanding, and the stock is trading 10.41 per cent above the 50 DMA. The mov ing average ribbon has turned upward. The MACD is bullish and above the zero line, while the RSI is in the bullish zone, above 60 on the weekly time frame. On the daily time frame, the RSI has shifted into a super bullish range. The KST has given a fresh bullish signal, and the Elder Impulse System has formed a strong bullish bar. 

In short, the stock has registered a breakout. A move above Rs 1,540 is positive, and it can test Rs 1,660 to Rs 1,700. Maintain a stop loss at Rs 1,458. 

REVIEW OF STOCK STRATEGY 

In issue no. 15, dated January 29, 2026, we recommended pur chasing shares of NTPC at Rs 358.1. The stock was on the verge of a multi-month breakout of a continuation price pattern at the time of recommendation. Post recommendation, during the recent weakness in the market, it witnessed a sell-off, which can be considered a pullback move. After this, it recovered soon and rallied higher. Recently, it marked the multi-month break out. The volume cluster shows lower activity in this corrective price action, which is supportive of our view. We expect a rally towards our target soon; hence, we recommend holding the position with the mentioned stop-loss.

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