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The Nifty moved in a 50-60 points range before last-hour buying in auto and information technology names pushed it above the spurred psychologically vital 18,000 mark on February 15.
The index closed 86 points higher at 18,016, the first time it closed above 18k since January 24.
It formed a long bullish candlestick pattern on the daily charts, breaking the Budget day’s range after nine sessions. It also decisively broke out of downward-sloping resistance trendline adjoining highs from record highs, signalling the possibility of a further upmove.
It made higher highs, higher lows for the second consecutive session, trading above all short-long term moving averages.
If the momentum sustains, with intermittent consolidation and correction, the next stop could be 18,200-18,300 followed by 18,500. Support is at 17,900-17,800, experts said.
“The Nifty has also formed a bullish candle and a higher bottom formation on intraday charts which supports further uptrend from the current levels,” Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities said.
For the trend-following traders, 17,900 will be the key support, above which the index can move to 18,100-18,150, he said. Below 17,900, the bulls may exit long positions.
On the weekly Options front, the maximum Call open interest was at 18,200 strike, followed by 18,100 strike, which are expected to be resistance levels for the coming sessions, with Call writing at 18,100 strike, then 18,200 strike.
On the Put side, the maximum open interest was at 17,800 strike followed by 17,900 strike, which can be the support levels for the coming sessions, with writing at 18,000 strike, then 17,900 strike and 17,800 strike.
The data indicates that for the upcoming sessions, the Nifty can trade in the 17,800-18,200 range.
India VIX, which measures the expected market volatility over the next 30 days, declined further by 4.4 percent to 12.86 level.
Banking index
The Bank Nifty opened higher at 41,675 and moved in the 41,700-41,450 range before closing 83 points higher at 41,731.
The index formed a small Hammer pattern with a long lower shadow on the daily scale, which suggests buying at support zones.
The Bank Nifty underperformed the Nifty but gave its highest closing since January 24.
“Now it has to continue to hold above 41,500 to make an up move towards 42,000 and 42,250 levels, while on the downside, support is expected at 41,500 then 41,250 levels,” Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services, said.
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