The Nifty50 recouped some of its previous day's losses to close the session above psychological 11,000-mark on Tuesday, forming strong bullish candle on the daily charts.
The rally was backed by oil & gas, banking & financials, metals and pharma stocks. All sectoral indices closed in the green except IT index which fell a percent.
The broader markets, which were badly hit in the previous session, also participated in the rally with Nifty Midcap index rising more than 2 percent.
The Nifty50 after opening higher at 10,939.65 wiped out early gains to hit an intraday low of 10,925.60, but managed to recoup those losses in morning trade itself and reclaimed psychological 11,000-mark in later part of the session. The index hit an intraday high of 11,018.50, before closing 71.10 points higher at 11,008.
The closing above 11,000-mark is a good thing but to maintain that momentum, the index has to close above 11,080 levels and then only it can be able to march towards its earlier life time high of 11,171 seen in January, experts said.
"It was heartening to see Nifty50 strongly recoiling after testing erstwhile breakout point present around 10,930 levels before bulls signed off the session in style with a strong bullish candle.
He said on the back drop of today’s move it appears that the last three sessions of corrective consolidation phase is a mere pause in the ongoing strong uptrend as advance decline ratio also tilted in favour of bulls during the course of the day.
Momentum in the indices shall pick up further on a close above 11,080 which shall also confirm the end of recent corrective swing there by paving the way for new life time highs which may not be difficult as Bank Nifty which was looking relatively stronger registered a bullish engulfing formation thereby erasing Monday's losses.
Hence, traders are advised to create fresh long positions with a stop below 10,925 on closing basis and look for bigger targets around 11,171.
Nifty is forming wave extension on the upside on the daily chart. "This means that the bulls are likely to push the index towards north.
India VIX fell by 0.52 percent to 12.88 levels.
On the option front, maximum Put open interest (OI) was seen at 10,600 followed by 10,800 strike while maximum Call OI was at 11,000 followed by 11,200 and 11,100 strikes. Significant Put writing was seen at all the strikes from 10,800 to 11,000 while Call unwinding was seen at 11,000 strike.
Option band signifies an immediate trading range in between 10,929 to 11,080 zones, experts suggest.
Nifty index managed to hold immediate support of 10,925-10,929 zones and recovered towards previous day’s high of 11,020 zones.
It retested previous breakout zones and a hold above 11,000 could extend its move towards 11,080 then 11,171 levels while on the downside supports are seen at 10,929 zones.
Bank Nifty formed a Bullish Belt Hold candle on daily scale and managed to reclaim above 27,000 zones.
Now it has to continue to hold above 26,750 zones to extend its move towards 27,165 then 27,400 levels.
MORE WILL UPDATE SOON!!
