The Nifty gained momentum after early volatility and gradually crossed the 9,300-mark, rising 3 percent on May 27, a day ahead of the expiry of May derivative contracts. Positive European cues, the hope of reopening of the economy and a rally in banking & financials lifted the mood.
The index gained sharply after seeing rangebound trade in the previous three sessions and formed a bullish candle on daily charts, as the closing was higher than the opening levels.
As the bulls seem to be in a strong mood, Nifty can touch 9,500, experts say.
The Nifty50 opened higher at 9,082.20, lost momentum to hit an intraday low of 9,004.25 but immediately recouped the losses in the initial hour itself. It extended gains as the session progressed to hit the day's high of 9,334 in the late hour. The index closed at 9,314.95, up 285.90 points or 3.17 percent.
“Interestingly correction from the recent highs of 9,889, registered on last April 30, appears to have unfolded in a downsloping channel for 17 trading sessions and with today's breakout above the said channel, the bulls seems to have unleashed a fresh leg of upswing," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
He said in that scenario retest of recent swing highs placed around 9,889 can't be overruled going forward, as the current breakout target based on the width of the channel is also placed around 9,850.
On the upside, the bulls may face some hiccups around 9,500 as recent correction from the highs of 9,889 also occurred after testing 55-day EMA (placed at 9,516), he added.
Mohammad advised traders to retain positive outlook as long as the Nifty sustains above 9,000 levels on the closing basis. They should make use of dips to create fresh long positions for a bigger target of close to 9,850 levels, he said.
Sahaj Agrawal, Head of Research-Derivatives at Kotak Securities, said the higher side the initial target is seen at 9,500, above which a further upside up to 10,000 is possible.
"Open interest concentration has seen at 9,000 Put and 10,000 Call for the June series. Open interest addition has seen in Banking and IT stocks; expect the same to trade with a positive bias," he said.
The Bank Nifty opened at 17,603.40 and extended the rally to hit the day’s high of 18,874.25 in late trade.
The index was the biggest gainer among sectors, rising 1,270.15 points or 7.28 percent to close at 18,710.50 and formed a bullish candle on the daily charts.