The Nifty decisively surpassed the crucial hurdle of 17,450 after seven days of consolidation to close a percent higher on March 30 on positive global cues.
The index remained strong throughout the session after opening at 17,468. It hit the day’s high of 17,522 and low of 17,387 before closing 173 points higher at 17,498.
It formed a small-bodied bullish candle on the daily charts ahead of expiry of futures & options contracts for March but seems to be indicating some kind of indecisiveness among bulls and bears.
It is important for the index to sustain 17,450 levels in coming sessions, as it can push the index in a short-covering-led rally towards the 17,900-mark, experts said.
The further fall in volatility also supported the bulls. India VIX was down by 3.24 percent to 20.61 levels.
"In the expiry session, it looks crucial for the index to sustain above 17,387 levels to retain the bullish bias," said Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia.
Also read: Gainers & Losers: 10 stocks that moved the most on March 30
If the Nifty manages to sustain above 17,450 levels for more than one hour on March 31, the expiry day, it may prompt a short-covering rally. In that scenario, "a bigger target of 17,900 cannot be ruled out in the next couple of sessions," he said.
If the index closes below 17,387–17,343, it will once again encourage bears, said Mohammad. For the time, if someone is long, they should hold with a stop-loss below 17,387 and look for an initial target of 17,800.
Given the consistent upside for the third day, the immediate trading range for the Nifty, indicated by the options data, moved to 17,250-17,700 from 17,000-17,500.
On the options front, maximum Call open interest was seen at 18,000 strike followed by 17,500 strike, while maximum Put open interest was seen at 17,000 strike followed by 16,500 strike.
Minor Call writing was witnessed at 17,600 strike then 17,550 strike while Put writing was seen at 17,400 strike then 17,500 strike.
Banking stocks played a big role in the rally. The Bank Nifty opened gap up at 36,242 and ascended above 36,400.
Heavyweight private banks drove the movement in the index, which closed 487 points up at 36,334.
The index formed a small-bodied bullish candle on the daily scale near its 50-day EMA (exponential moving average 36,315) levels.
"Now it has to hold above 36,250 levels, for an up move towards 36,600 and 36,750, whereas support can be seen at 36,000 and 35,750 zones," said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
On the stock front, positive setup was seen in Mindtree, Adani Enterprises, Zee Entertainment Enterprises, Bajaj Finserv, SRF, IRCTC, Tata Consumer Products, Power Grid Corporation, Bajaj Finance, Grasim, Cholamandalam Investment, DLF, L&T Technology Services, Axis Bank and ICICI Bank. Weakness was seen in ONGC, NALCO, Aurobindo Pharma, ITC, Tata Steel, Tech Mahindra, HPCL, SAIL, Biocon and Titan.
The broader markets also participated in the run. The Nifty midcap 100 index was up 0.85 percent and the smallcap 100 index gained 0.97 percent.
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