Mazhar Mohammad of Chartviewindia.in advised positional traders to remain long for an initial targets of 10,328 with a stoploss below 9,840 levels.
After a volatile opening, the Nifty50 gained momentum in late morning deals and extended gains to decisively break the last three-day range with strong close despite weak global cues on June 18.
The rally was driven by banks, which got some relief after the Supreme Court allowed more time to the Department of Telecommunications (DoT) to review the payment proposals submitted by the telecom companies in the adjusted gross revenue case.
The market shrugged off Fitch Rating's negative outlook on India and also growing tensions between India and China.
The index closed above the psychologically important 10,000- mark and formed a large bullish candle on the daily charts as closing was much higher than opening levels.
The decisive close above 10,000 clearly indicated that the index may march toward 10,300, the critical resistance, experts say.
For the time, positional traders should remain long for an initial targets of 10,328, with a stoploss below 9,840 levels, said Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in. A breach of 9,845 on a closing basis can dissipate the strength in the current upswing.
The Nifty50 opened slightly lower at 9,863.25 and slipped to hit the day’s low of 9,845.05 but picked up momentum in late morning deals and extended rally to touch the day's high of 10,111.20 before signing off the session at 10,091.70, up 210.55 points or 2.13 percent.
"The Nifty50 appears to have registered a minor breakout as it emerged out of a three-day old congestion zone present between 10,048 – 9,726 levels with a smart recovery from intraday low of 9,845. As long as the Nifty sustains above 9,845 levels, one should retain optimistic outlook and look for bigger targets," Mohammad said.
The current breakout is projecting a 300 points with target towards 10,300 levels, he said. The Nifty needs to get past its 100-day simple moving average, whose value is placed around 10,112 levels, as the said average is successfully curtailing the upsides since the swing highs of 10,328 on June 8.
Once it gets past it, the upswing can get extended up to 10,328, he said.
"However, the Nifty shall witness a sustainable upmove only when it manages a close above 10,328 levels, which shall open up bigger targets. In that scenario, the bulls shall march towards initial targets of 10,750 levels," he said.
Manish Hathiramani, Proprietary Index Trader and Technical Analyst at Deen Dayal Investments, also said markets had gone past the resistance level of 10,050, which was good.
"We are back in an uptrend and should target 10,300 as the next level of resistance," he added.
The Bank Nifty also mirrored the Nifty, hitting an intraday low of 20,030.35 in the morning and a high of 21,028.35 in late trade after opening at 20,137.60.The index closed with 754.55 points, or 3.74 percent, gains at 20,956.30 and formed a large bullish candle on daily charts.