The Nifty went past 17,600 early on October 19 but failed to hold on it following profit booking at higher levels as a cautious mood in global counterparts affected sentiment.
After opening 80 points higher at 17,568, the index hit an intraday high of 17,608, but profit booking in the afternoon saw it close at 17,512, up 25.30 points.
It formed a small bearish candle on the daily charts as the closing was lower than the opening levels.
The mood, however, is expected to remain positive in the short term, with the next resistance at 17,600-17,700 and support at 17,400-17,300, experts said.
“Technically, the Nifty has formed a small bearish candle on daily charts. However, the short-term texture of the market is still positive,” Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities said.
Chouhan is of the view that 17,400 will be the sacrosanct support zone for the index. If the index trades it, it can move to 17,600-17,700 in the near future.
The uptrend, however, would be vulnerable below 17,400, the market expert said.
The broader market mirrored the benchmark. The Nifty Midcap 100 and Smallcap 100 indices gained a little more than 0.2 percent each amid weak breadth. About 1,087 shares declined against 879 advancing shares on the NSE.
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The options data suggests that the lower band of the immediate trading range for the Nifty has shifted higher to 17,300 from 17,200, with the upper band remaining at 17,700 levels.
On the options front, the maximum Call open interest was seen at 18,000 strike followed by 17,500 strike, while the maximum Put open interest was at 17,000 strike then 16,500 strike.
We have seen Call writing at 17,600 strike followed by 17,700 strike, while Put writing was seen at 17,500 strike then 17,400 strike.
The volatility index India VIX was up 0.20 percent at 17.49 levels.
Also read: Taking Stock | Sensex up 147 points, Nifty above 17,500 as rally continues for the fourth day
Banking index
The Bank Nifty opened 238 points higher at 40,557 but a lack of follow-up buying was seen at higher zones and it dropped up to 40,195.
It moved in a range of 360 points and closed 55 points higher at 40,373.
The banking index formed a small-bodied bearish candle on the daily scale but formed higher highs from the fourth straight session. It has to hold above 40,250 to make an up move towards 40,750 and 41,000, whereas supports are placed at 40,000 and 39,750 levels, Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
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