The Nifty extended gains for the second consecutive session on September 20, tracking positive Asian counterparts and closed 1.1 percent, or 194 points, higher at 17,816.
The rally was across sectors, with the Nifty Pharma emerging as the biggest gainer rising 3 percent followed by auto, banking & financial services and metal indices.
The index formed a decent bullish candlestick pattern on the daily charts. If it closes decisively above 17,820, the Friday's high, and sustains in following sessions then 18,000-18,100 on the Nifty can't be ruled out in the near term, with crucial support at 17,400-17,500, experts said.
"The Nifty had started to gap up and remained range-bound during the day. On the higher end, 17,900 has acted as resistance leading to a close near the day's low," Rupak De, Senior Technical Analyst, LKP Securities, said.
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The trend will likely remain positive as long as the index sustains above 17,700. On the higher end, a move above 17,900 may induce a rally towards 18,100 and higher, the expert said.
The broader markets also joined bulls' party as the Nifty Midcap 100 index rose 1.4 percent and Smallcap 100 index gained 1.1 percent on strong breadth. About two shares advanced for every declining share on the NSE.
A drop in volatility also supported the rally. India VIX, which measures the expected volatility in the market, declined 5.72 percent to 18.80 levels.
If volatility drops below 18 and sustains, bulls can have upper hand in coming sessions, experts said.
On 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 17,500 strike followed by 17,000 strike.
We have seen Call writing at 17,900 strike then 18,000 strike while Put writing was seen at 17,800 strike then 17,550 strike.
The data indicates an immediate trading range between 17,500 and 18,000.
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Banking index
The Bank Nifty also opened gap up by around 400 points at 41,304 and hit an intraday high of 41,677.
The closed 564 points higher at 41,468 and formed a small-bodied bullish candle on the daily charts.
"Now it has to cross and hold above 41,500 levels to continue the positive momentum towards lifetime high of 41,840 and 42,000 levels, while on the downside, support is seen at 41,250 followed by 41,000,” Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
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