Amit Shah of Indiabulls Ventures said index has risen from the levels of 11,100 to 11,700 zone and few days of consolidation cannot be ruled out going ahead.
The Nifty50, after hitting a three-month high amid consolidation, slipped into the red in the afternoon and closed sharply lower on October 22. The correction in Infosys, Bajaj Finance, auto and metals stocks dragged the market, but banks and FMCG provided some support.
The index closed below 11,600 levels after six straight days of gains and formed bearish candle on daily charts.
The correction was due after a rally seen in the previous week, but overall sentiment remained positive, experts said, adding there could be consolidation in the coming session and 11,500 could be crucial support.
India VIX moved up by 5.52 percent to 16.81 levels.
The Nifty50, after opening flat at 11,657.15, hit an intraday high of 11,714.35 amid consolidation, but further selling pressure in Infosys and profit booking among others dragged it to day's low of 11,573.65 in the afternoon. The index closed 73.50 points lower at 11,588.40.
"Nifty index is continuously forming higher highs-higher lows from past six trading sessions and supports are gradually shifting higher. Now it has to continue to hold above 11,550 levels to witness momentum towards 11,700 then 11,800 while on downside major support is seen at 11,500 zones," Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
Amit Shah, Technical Research Analyst with Indiabulls Ventures said the index has risen from the levels of 11,100 to 11,700 zone and a few days of consolidation cannot be ruled out going ahead. The broader trend continues to remain positive and traders should look at declines as an opportunity to build long positions, he added.
On the monthly options front, maximum Put open interest was seen at 11,000 followed by 11,500 strike while maximum Call open interest was seen at 12,000 followed by 11,700 strike.
Call writing was seen at 11,800 then 11,700 strike while marginal Put writing was seen at 11,600 strike. Option data suggests the Nifty could trade in a range of 11,500 to 11,800 levels going ahead.
Bank Nifty opened positive, extended its gains towards 29,700 levels and relatively outperformed the benchmark index. The index closed 1.02 percent higher at 29,416.35 and formed a Doji candle on the daily scale as it closed near its opening levels.
"But index formed higher highs - higher lows from past five sessions which indicates overall strength. It has to continue to hold above 29,000 to witness momentum towards 29,750, then 30,000 levels while on the downside supports are seen at 28,750 then 28,500 levels," Chandan Taparia said.Amit Shah feels the trend continues to remain on the upside. "Overall Bank Nifty is likely to retest recent swing high of 30,800 zone as the index is trading above all the near term key averages," he said.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.