The Nifty broke out of the consolidation range after five days with one percent rally on September 8 following a sharp correction in crude prices and an upside in banking and financial services as well as technology stocks.
The index closed 174 points higher at 17,799, closing above the consolidation range of 17,400-17,777, forming a bullish candle on the daily charts.
Follow-up buying is needed to confirm bullish bias, which can take the Nifty above the 18,000 mark, experts said.
“The follow-up is required in the next trading session, as this rally can also be attributed to the weekly expiry factors. On further strength, the index can initially head towards its next hurdle placed around 17,992 levels,” Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia said.
It needs to sustain above the weekly expiry sessions’ bullish gap zone of 17,691 and 17,650 levels.
Weakness can be expected if the index closes below 17,650. Traders with high risk-taking ability can buy the dips for a target of 17,990 but the stop-loss shall remain below 17,650 levels, the market expert said.
Buying was also seen the broader space. The Nifty midcap 100 index gained 0.2 percent and the smallcap 100 index rose nearly one percent, as about three shares advanced for every two declining shares on the NSE.
Volatility was lower, offering comfort to the market. India VIX, which indicates expected volatility over the next 30 days, was down by 5.48 percent to 18.31 levels.
On the options front, the maximum Call open interest was seen at 18,000 strike followed by 18,500 strike, while maximum Put open interest was seen at 17,000 strike then 17,500 strike.
Call writing was seen at 18,000 strike followed by 18,500 strike, while marginal Put writing was seen at 17,800 then 17,700 strike.
The data and the day’s rally indicate a shift in Nifty’s trading range to 17,300-18,200 from 17,000-18,000.
Banking index
The Bank Nifty opened 300 points higher at 39,764 and hit the day’s high of 40,266. It closed 753 points higher at 40,209.
The index formed a small bullish candle on the daily scale and had its best closing in 215 trading sessions.
It has to hold above 40,000 to make an up move towards 40,500 and 40,750, whereas supports are placed at 40,000 and 39,750, Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
