Mazhar Mohammad said it looked prudent on the part of traders to avoid trading in index but they are advised to look for stock specific opportunities.
The Nifty50 opened the week on a strong note and remained so throughout the day to end at record closing high on January 13. Infosys' increase in full year revenue forecast along with clean chit to CEO and CFO in whistleblower case and positive global cues lifted the sentiment.
The index closed above 12,300 level and formed small bullish candle on daily charts as closing was higher than opening value.
Given the consistent rally in last few sessions, the upside appears to have stretched now and hence the consolidation can be seen in coming sessions, though the overall momentum remains in favour of bears, experts feel.
The Nifty50 after opening higher at 12,296.70 remained strong and hit an intraday all-time high of 12,337.75. The index finally settled at 12,329.50, up 72.70 points.
"As this index is trading abnormally away from its short term averages some consolidation in the next few trading sessions can't be ruled out as upsides appears to have stretched. Hence, weakness in next session can be expected if it trades below 12,285 with intraday target of 12,224 level," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
He said contrary to this, if index sustains above 12,337 level then upside strength may get extended towards 12,400, but that rally on upside may be shortlived.
Hence, at this point in time, it looks prudent on the part of traders to avoid trading in index but they are advised to look for stock specific opportunities, he added.
The upmove was mainly led by decent rally in IT and FMCG stocks.
"Overall trend of the market is positive and supports are gradually shifting higher. Option data indicates a trading range in between 12,000 to 12,500 levels," Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
On options front, maximum Put open interest was at 12,000 followed by 11,500 strike, while maximum Call open interest was at 12,500 followed by 12,600 strike.
Call writing was seen at 12,600 strike while Put writing was seen at 12,300 then 12,200 strike. India VIX moved up by 1.38 percent to 14.27 levels.
Bank Nifty formed an Inside Bar on daily scale as it moved within the trading territory of previous day session. It got stuck in narrow range of 250 points and relatively underperformed the benchmark index. It closed at 32,177.70, up 80.30 points."The banking index have to cross its strong hurdle of 32,500 – 32,600 zone for extension in rally towards 33,000 mark. While support is now placed at 31,900 and 31,500 levels. Overall chart structure of Bank Nifty is positive and thus, traders are advise to trade with positive bias till it holds above 31,500 mark," Chandan Taparia 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.