If the Nifty manages to close above 12,030, then it can jump to 12,100 or even 12,170 levels. Weakness could be seen below 11,880 levels, experts say.
After a muted start, the benchmark indices managed to recoup losses and turned positive after testing crucial support levels on October 14, thanks to a smart rally in the banking pack.
The S&P BSE Sensex rose 169 points to close at 40,794 while the Nifty50 gained 36 points to end at 11971. The broader markets ended mixed.
Sectorally, action was seen in finance, banks, realty, and capital goods space while some profit-taking was visible in utilities, power, IT, and oil & gas space.
A close above 12,000-12,030 is needed for the bulls to take control experts said but they didn't rule out consolidation as the index has been rallying for 10 straight days.
Among sectors, the Bank Nifty gained the most and rallied over 1.59 percent. The Bank Nifty has formed a bar reversal formation and it would move to 24,200 or 24,600 levels.
“We are of the view that massive recovery in the bank sector helped indices to recover sharply from lower levels and closed above the highest of the previous day.” Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities told Moneycontrol.
“Technically, we feel it’s a bullish continuation formation, however, for that the Nifty needs to cross the level of 12,030. Above 12,030 levels, the Nifty could jump to 12,100 or even 12,170 levels. Expect weakness below 11,880 levels,” he said.
Here is what experts have to say on what investors should do on October 15:
Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas
After a brief consolidation, the index took a leap on the upside towards the end of the session. The hourly chart also reveals that the Nifty has formed a bullish Flag pattern and has broken out of it.
The price action over the last three sessions has resulted in a Popgun Bar pattern formation on the daily chart.
Thus the October 13 low of 11,822 now becomes key short-term support. Going ahead, 12,000-12,022 will be the immediate hurdle, with the short term target placed at 12,130.
Mazhar Mohammad, Chief Strategist–Technical Research & Trading Advisory, Chartviewindia.in
A close observation of the last five sessions reveals that the Nifty’s movement is almost flat with narrow ranges and indecisive formations. Hence, unless the Nifty registers a strong close above 12,022, further upward strength shall not be expected. A close below its 5-Day simple moving average (11916) can be considered as an initial sign of weakness.
A close below 11,800 can accelerate the selling pressure by tilting the tide in the favour of the bears thereby ushering in the much-needed correction. In case the Nifty registers a close above 12,022 then the upward swing can get extended towards 12,200.
For the time, traders are advised to avoid long positions unless the Nifty closes above 12,020, whereas positional traders with a high-risk appetite can consider shorting on a close below 11900, with a tight stop above 12,030 and look for much bigger targets.
Ajit Mishra, VP - Research, Religare Broking Ltd
The rebound is along expected lines and we expect further surge ahead. Participants should keep a close watch on earnings announcements as well as global markets. We reiterate our view to be extra cautious in the selection of trades due to limited participation and prevailing volatility.
Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities
The Nifty traded with a positive undertone for the series and hence witnessed a strong recovery from 11,850. Momentum and options setup both are positive and suggest buying on corrections.
For the medium term, the upside target is seen at 12,150-12,200 while in the short term it is expected to remain consolidative. Banking, auto, metals and realty stocks are trading in the buying zone while IT can be avoided from a trading perspective.Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.