The Nifty50 opened above crucial resistance of 9,400 and traded strong throughout the session to testing 9,600 intraday on April 29, driven by banking & financials, auto, IT and metals stocks.
The index continued its rally for the third consecutive session to close above 9,500 ahead of April derivative contracts expiry and formed a bullish candle on daily charts-- the closing was higher than the opening --after forming indecisive patterns in the previous three days.
Experts feel as the index closes decisively above 9,400, it can head towards 9,700 in the coming sessions.
Considering the long weekend and the beginning of new series ahead, short- term traders are advised to book profits in the next session.
The Nifty50 started off day at 9,408.60 and gained strength to hit the day's high of 9,599.85 in late trade. The index closed at 9,553.35, up 172.45 points or 1.84 percent.
"Finally after seven days of struggle, the Nifty appears to have registered a decisive breakout as it closed way above its 500 points congestion zone placed between 9,400 – 8,900 levels. Though from current levels, the projected target can be in the zone of 9,900 – 9,970 levels, it can face some selling pressure around its 50-day exponential moving average whose value is placed around 9,740 levels," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in, told Moneycontrol.
Once this resistance point (9,740) is decisively conquered, then the bulls should ideally march towards the 9,900 –9,970 zone.
On the downside, the index needs to sustain above 9,390 as a breach on closing basis can negate the current bullish set up, he said.
The Nifty is expected to test 9,900-10,000 in the next few weeks, said Sahaj Agrawal, Head of Research-Derivatives, Kotak Securities.
The broader markets also participated in the run, as the Nifty Midcap index gained 1.28 percent and Smallcap rose 0.72 percent.
"Broader participation is increasing, which is a positive sign and reinforces the positivity. On the down side, trend support is seen only at 8,900. We expect the broader markets to remain positive over the next few weeks," Agrawal said.
The Bank Nifty also continued to gain momentum and outperformed the benchmark Nifty50 for the third straight day, climbing above the crucial 21,000-mark. The index rallied 419.10 points or 2.03 percent to close at 21,090.20 and formed a bullish candle on daily charts.
"Now, the index has to hold above 21,000 to witness a positive momentum towards 22,000 - 22,500 levels. At current juncture, immediate support is placed at 20,500 then 20,250 levels while resistance is placed at 21,500 and 22,000-22,500 levels," Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
